Obama tries to block AIG bonuses

The White House has said it is going to try to block millions of dollars of bonus payments to staff of giant insurance and financial firm American International Group.

AIG – which was at the centre of the financial market meltdown – has received 180 billion dollars in US government bailout money as it was deemed too big to fail. News of the bonuses led an angry President Barack Obama to say: “This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances it’s hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay.” Economist Peter Morici said the White House may protest but AIG has run rings around the US government: “AIG has learned that they can ‘game’ the Department of the Treasury. Whether it is George Bush’s Treasury, Barack Obama’s, Henry Paulson’s or Timothy Geithner’s.” US politicians are also furious that more than half of the US taxpayers’ money that went to save AIG from collapse was then paid on to a number of banks including Goldman Sachs, Societe Generale Deutsche Ban, Barclays, Merrill Lynch and Bank of America. Twenty US states and dozens of companies also benefited. AIG said – as with the bonuses – it was legally required to pay that money. Obama is asking Treasury Secretary Timothy Geithner to pursue “every single legal avenue” to cancel the bonuses. New York state prosecutor Andrew Cuomo said he is investigating whether any of those getting bonuses were involved in AIG’s meltdown which might make the payments illegal.More about: AIG, Barack Obama, USA

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