Ken Feinberg, the Obama administration's pay czar, is insisting that bailout recipient AIG fulfill pledges from its employees to return portions of their controversial 2009 retention payments, ABC News has learned.
When the insurance giant – the recipient of a record $182 billion in taxpayer aid – dished out $168 million last March, there was massive popular backlash. Under pressure from the government and the general public, Ed Liddy, the CEO at the time of the troubled insurance giant, told Congress at a March 18 hearing that he was taking steps to get the money back.
"This morning I have asked the employees of AIG Financial Products to step up and do the right thing, specifically I've asked those who received retention payments in excess of $100,000 or more to return at least half of those payments," Liddy said. "Some have already stepped forward and offered to give up 100 percent of their payments."
At the time the company had 298 employees receiving bonuses worth at least $100,000.
"We will work to ensure the highest level of employee participation in this effort in the days ahead and we will keep the Congress and the American people informed of our progress," Liddy told lawmakers.
Only $19 Million Returned Out of $45 Million
But nearly a year later, the government is still in negotiations with AIG to get the money back. A government audit in October said that as of August employees had pledged to return a total of $45 million in payments, but only $19 million had been collected.
Feinberg has repeatedly told the insurance giant that the repayment of the remaining $26 million in bonus pledges is a non-negotiable issue.
A resolution may come in the next two months when Feinberg is expected to issue his rulings for 2010 pay plans at five companies receiving "exceptional assistance" from the government. The companies are AIG, General Motors, Chrysler, GMAC, and Chrysler Financial.
AIG had no comment on the status of the fulfillment of the bonus pledges other than saying that they continue to work with Feinberg on compensation issues.
Government Waits for Insurance Giant AIG to Return Payouts to Top Employees
The insurance giant also has $198 million in retention payments due to employees in March of this year. If last year's developments are any indication, there could be more backlash.
In a statement at the White House last March 18, President Obama said, "People are rightly outraged about these particular bonuses. But just as outrageous is the culture that these bonuses are a symptom of, that have existed for far too long – a situation where excess greed, excess compensation, excess risk-taking have all made us vulnerable and left us holding the bag."
Days earlier, the President's top economic adviser, Larry Summers, had said on "This Week," "There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous…What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous."
And at the House hearing featuring Liddy, Rep. Paul Hodes, D-N.H., said, "AIG now stands for 'Arrogance, Incompetence, and Greed."
Later this week another House panel – the Oversight & Government Reform Committee – will hold a hearing on the AIG bailout. Treasury Secretary Tim Geithner, among others, will testify.