A growing bipartisan chorus of lawmakers is condemning insurance giant AIG for deciding to pay out $165 million in bonuses despite receiving $170 billion in taxpayer bailout funds and some are demanding that AIG renounce the bonuses - or else.
Senator Russ Feingold sent a letter to Treasury Secretary Timothy Geithner, urging the Obama administration to explore "legal options" to prevent the millions in AIG payouts, reports CNN.
"I write to ask why any bonuses would be legally required, given the company's abysmal performance," says Feingold, D-Wisconsin.
Feingold asked whether the bonuses could be canceled or recouped from recipients, and whether the administration will sue AIG executives for breaching their duties to shareholders
And some Obama administration officials seem amenable to that position.
Christina Romer, chair of the White House Council of Economic Advisers, told NBC's "Meet the Press":
"Can I say, we're -- we're the first people to be angry. So absolutely Secretary Geithner has been furious and has been pushing back, urging them to renegotiate this. We're pursuing every legal means to deal with it."
House Speaker Nancy Pelosi issued a written statement calling the pay-outs "unconscionable" and said Congress would seek to "recover taxpayer funds of companies that abuse the privilege of taxpayer assistance," reports Fox News
"I call upon the executives at AIG to right the wrong they have done to American taxpayers, who are footing the bill for the most expensive government rescue in history. They should renounce the bonuses and refuse the excessive retention pay they previously agreed to," Pelosi said.
Rep. Elijah Cummings, D-Md., also released a written statement Sunday calling on AIG Chairman Edward Liddy to step down.
And Rep. Barney Frank, the chair of the House Financial Services Committee, said it was "wrong" on Fox News. "This is an example of people at the commanding heights of the economy misbehaving, abusing the system."
GOP leaders, such as Mitch McConnell, also criticized the payouts.
"It is an outrageous situation," said Sen. Minority Leader Mitch McConnell on ABC. "If you are going to take the government as a partner, the message to any business out there...is 'lets enter into a bunch of contracts real quick and we'll have the taxpayers pay bonuses to our employees.' This is an outrage."
As Huffington Post's Sam Stein reported earlier today, some administration officials say that while they "shared such populist indignation, they insisted that on this front their hands were tied."
Larry Summers, chairman of the White House National Economic Council, appearing on ABC's This Week, said the Obama administration was largely powerless to stop the cash rewards. "We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system."
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