Insurance Giant Doles Out Bonuses Despite Outcry
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Insurance giant AIG says it has no choice but to award its executives tens of millions of dollars in new bonuses, citing possible legal backlashes.
That's after the investment giant received $170 billion in taxpayer bailout money.
AIG's chairman says the payments were contractually agreed to last year, before the firm buckled under severe financial pressure.
The chairman says the company could be sued if it doesn't pay the bonuses.
The Treasury Department says the feds don't have the legal right to block current payments.
"There are a lot of terrible things that have happened in the last 18 months. But what's happened at AIG is the most outrageous. What that company did, the way it was not regulated, the way no one was watching what's proved necessary. It is outrageous," said National Economic Council Director Lawrence Summers.
AIG says it has agreed to the federal government's request to cut back on future bonuses.