In responding, Geithner seemed to focus on Crowley's concerns about future compensation limits rather than "clawing back" AIG bonuses.
"I just want to point out that compensation practice across the financial services industry ... just got out of whack with basic fundamentals, and people were paid for risks that weren't captured in compensation," he said at the time. "And part of what we do to make sure this kind of crisis doesn't happen in the future is to change those basic incentives, and there's going to be a role for government in doing that."
A Treasury Department spokesman reiterated that Geithner was not aware of the "full extent" of the retention payments until March 10.
"There has been information in the public arena about AIG's retention bonuses for many months, including information about particular bonuses to employees of the financial products division," said Treasury spokesman Isaac Baker. "However, although Congressman Crowley raised the issue of the bonuses three weeks ago, Secretary Geithner was not aware of the timing or full extent of the contractual retention payments or the other bonus programs until his staff brought them to his attention on March 10."
Once briefed, the spokesman said, Geithner consulted with the Federal Reserve and called Liddy to insist that the bonuses be renegotiated.
"At the president's direction, he is exploring all legal means to recoup the retention bonuses and ensure that taxpayers are compensated for any payments not recovered," he said. "Knowing about these 2008 retention payments any earlier wouldn't have changed the outcome, given the legal restraints, but Secretary Geithner is already working with AIG to restructure the 2009 payments going forward."
With reports from ABC News' Jonathan Karl.