11 who got $1M bonuses have left AIG; Obama weighs options

In a letter Tuesday to Rep. Barney Frank, chairman of the House Committee on Financial Services, Cuomo outlined the bonus and contract information and asked the panel to take up the issue at a hearing scheduled for Wednesday.

According to the attorney general's office, the top individual bonus was more than $6.4 million, and the top seven received more than $4 million each.

AIG has received about $170 billion in federal bailout money over the last year.

In Congress:

• Senate Majority Leader Harry Reid said the tax-writing Senate Finance Committee will issue a proposal in the next day or so that would require AIG to return to the government at least a portion of the bonuses paid out last week.

• Sen. Charles Schumer, D-N.Y., proposed legislation Tuesday. "This is disgraceful, this is unacceptable and this is an offense to millions of hard working Americans whose tax dollars are the only reason AIG continues to exist," Schumer, speaking on the Senate floor, said of the bonuses. "We intend to do everything in our power to prevent those payments from being paid and recoup the money that has already been paid."

Schumer said he wrote a letter to AIG chief Edward Liddy urging him to tell his employees to voluntarily return the bonus money. Otherwise, Schumer said, Congress will pass legislation that would tax the bonus money at such a high rate that the AIG employees will be forced to pay it back through taxes.

"If you don't return it on your own we will do it for you," Schumer said.

• In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would tax at 100% bonuses above $100,000 paid by companies that have received federal bailout money.

"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."

• House Financial Services Committee Chairman Frank said the government should assert its rights as the owner of about 80% of AIG and sue to recover the bonuses.

"The time has come to exercise our ownership rights. We own most of the company. And then say, as owner, 'No, I'm not paying you the bonus. You didn't perform. You didn't live up to this contract,"' Frank told reporters.

• AIG would not be the only firm named by legislation in either the Senate or the House, and on Tuesday, New Jersey Sen. Robert Menendez said in a letter to Geithner that Morgan Stanley should be barred from paying as much as $3 billion to entice brokers to stay when the company and Citigroup merge their brokerage operations.

Menendez urged the government to use "every legal means available" to stop the payouts, for so long as Morgan Stanley is receiving support from taxpayers.

• Republicans said Obama and his administration should have leaned harder on AIG executives to reject the bonuses. The complaints sparked a low level hum about whether Treasury's Geithner could or should survive this latest political storm.

"I don't know if he should resign over this," said Sen. Richard Shelby, R-Ala. "He works for the president of the United States. But I can tell you, this is just another example of where he seems to be out of the loop. Treasury should have let the American people know about this."

If he tried to stop AIG from paying out the full bonuses beforehand, as presidential economic adviser Lawrence Summers told the Associated Press, Geithner obviously failed.

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