WASHINGTON (March 16, 2009)--President Barack Obama said Monday he will try to stop insurance giant AIG from paying out $165 million in executive bonuses after receiving a $170 billion taxpayer bailout.
He said AIG is in financial straits because of "recklessness and greed," and he said it's hard to understand how the executives deserved any extra pay, much less $165 million.
AIG recently reported losses of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.
Mr. Obama says his administration will "pursue every legal avenue" to stop AIG from paying out the bonuses.
Mr. Obama said he has asked Treasury Secretary Timothy Geithner to use the leverage of government assistance to AIG to get the company to roll back the bonuses.
He said the company cannot justify "this outrage to the taxpayers" who are keeping it afloat.
Meanwhile AIG says it used more than $90 billion in federal aid to pay out foreign and domestic banks, some of which received their own multibillion-dollar U.S. government bailouts.
The embattled insurer's disclosure came after demands from lawmakers that the names of trading partners that indirectly benefited from federal aid to AIG be made public.
Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion at the end of 2008.
The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.