President Obama ordered treasury secretary Timothy Geithner Monday to take all legal action needed to stop the payment of nearly $165 million in bonuses handed out by AIG to its executives, according to IHT.
AIG, a company that is currently staying afloat only because of federal bailouts, announced the bonuses on Sunday. President Obama, CNN reports, called the action an “outrage” because AIG “is a corporation that finds itself in financial distress due to recklessness and greed.”
Over the past six months, AIG has received nearly $173 billion in government bailout money, which is provided by taxpayers. Obama spared AIG’s new CEO Edward Liddy of criticism, saying the contracts that led to these bonuses were drafted last year. Nevertheless, they should have been shredded.
Obama was visibly dismayed and angry at the press conference. “All across the country, there are people who are working hard and meeting their responsibilities every single day, without the benefit of government bailouts or multimillion-dollar bonuses. You’ve got a bunch of small-business people here who are struggling just to keep their credit line open,” he said, referencing the tough times faced by many working Americans.
Obama’s words have garnered support from other democrats as well. Connecticut Sen. Christopher Dodd noted in a written statement that other companies receiving federal bailouts have been ordered to forgo bonuses, and there is no reason that AIG should view themselves above this rule.
Obama also told reporters that he would work with Congress to change laws in an effort to ensure this would never occur again.
Currently, New York Attorney General Andrew Cuomo is trying to work with Liddy to find out who was set to receive these bonuses and if any of them have been paid. Cuomo ordered Liddy to surrender a list of potential bonus receivers by 4 p.m. Monday, saying that if he failed to receive them he would seize them by order of subpoenas.
“Covering up the details of these payments breeds further cynicism and distrust in our already shaken financial system,” said Cuomo, CNN reports.