Treasury Secretary Timothy Geithner said in a letter to congressional leaders that a “contractual commitment” will be made with AIG to ensure that the Treasury is paid back the so-named “retentions” awards paid out to the tune of $165 million.

73 employees received the retentions bonuses, including 11 who no longer work for AIG.

The Treasury says it will deduct $165 million from the upcoming bailout, planned for the company since March 2nd. “We will continue our aggressive efforts to resolve the future status of AIG in a manner that will reduce the systemic risks to our financial system while minimising the loss to taxpayers,” said Geithner, “And we will explore any and all responsible ways to accelerate this wind down process.”

The U.S. government now holds a stake in the company of about 80 per cent.

Newly appointed chief executive officer, Edward Liddy, is due to appear in front of the House’s Financial Services Committee’s Barney Frank, who said that the company should be sued by the federal government to recover the funds.

Nancy Pelosi, speaker of the House of Rep. said that there is legislation in progress from a number of sources that could be ready posthaste for application against AIG in this issue.

 Print This   Email This   Share/Save