The American International Group — more commonly known as AIG — is paying out it’s executive bonuses to meet the Sunday deadline, but the company has agreed to restrain future payments by request from the Treasury Department.

Legal authority has never been granted to the Treasury Department to block or force modification of payments to executives, rather, the company’s chairman, Edward Liddy, has been requested personally, by Treasury Secretary Timothy Geithner to scale back the future payments where they will be legally allowed to.

Liddy said to the public that he felt the company’s hands were legally tied with regard to paying out this set of bonuses — a situation he called “disgraceful” at the hands of public funds.

The company’s payment, today, was in the tens of millions of U.S. dollars range; the company reported earlier this month that it suffered the largest corporate loss in history, over $60 billion in the fourth quarter of 2008.

A full overhaul of the bonus structure is expected from AIG to meet Geithner’s requests.

Liddy also expressed some serious concerns about the possible ‘brain drain’ seen from reducing their $9.6 million dollar bonuses due to be restructured shortly, adding that these skilled and talented employees would be necessary to turn the company around.

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