Probes Begin in Treasury-AIG Bonus Mess
Which officials knew what, when, how -- and what did they do about it?
March 19, 2009— -- The Treasury Department's top watchdog is investigating what role Treasury officials at all levels played in AIG's decision to award over $160 million to employees of its cataclysmically failed Financial Products division, sources say.
Treasury officials and particularly Secretary Timothy Geithner have faced questions and criticisms over what they knew of the bonus program and what actions they took, or didn't take, to prevent it.
The investigation by Treasury Inspector General Eric Thorson is one of several official probes into the AIG bonus fiasco.
At a House hearing Thursday, Neil Barofsky, the Special Inspector General for Treasury's Troubled Asset Relief Program, announced he was launching his own audit. It will examine who in the Federal government "knew what, how, when and why" about AIG's bonus program, Barofsky said.
He will also scrutinize AIG's employment contracts, and look at how government officials monitored and enforced executive compensation at bailed-out companies. New York Attorney General Andrew Cuomo has also been investigating AIG's bonus payouts.
Seeking to quell the furor over how Geithner and other administration officials have handled the situation, President Obama yesterday said he has "complete confidence in Tim Geithner and my entire economic team," and that he believed Geithner has made "all the right moves" in handling AIG.
The investigation by Treasury Inspector General Eric Thorson will examine what Treasury officials knew of AIG's "retention payment" plans for its Financial Products division, when they knew it, and what actions they took.
Thorson's probe was requested by Sen. Charles Grassley (R-IA). "As it appears that the [Treasury] Department's Office of General Counsel and others, were largely involved in these matters, I believe it is appropriate that you obtain the information I am seeking," Grassley wrote in his letter yesterday asking for an investigation. Thorson's office did not respond to requests for comment.
