President Barack Obama has expressed anger at $165m (£116m) bonuses paid to executives of bailed-out insurer AIG.
US President Barack Obama has expressed anger at $165m (£116m) bonuses pledged to executives of bailed-out insurer AIG, calling the payments "an outrage".
"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said.
"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said.
He also called the payments "an outrage" as he announced help for small firms hurt by the deep recession.
He has told Treasury Secretary Timothy Geithner to "pursue every single legal avenue" to block the bonuses.
He has told Treasury Secretary Timothy Geithner to "pursue every single legal avenue to block these bonuses and make the American taxpayers whole".
White House spokesman Robert Gibbs later said AIG's next bailout payment could be altered to protect taxpayers.
He did not say how this could be achieved, but analysts say the government could reduce the payment - which is $30bn - by $165m, in order to force AIG to account for the bonuses in another way.
'Play by rules'
'Play by rules'
The bonus payouts to executives were announced on Sunday by US insurance giant AIG.
AIG announced the bonus payouts on Sunday.
"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses," said President Obama.
In a speech which was intended to launch initiatives to help small businesses deal with the economic crisis, President Obama strongly criticised the company.
"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."
"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses," he said.
AIG insures financial institutions around the worldHis economic adviser Larry Summers said the recent goings on at AIG were "outrageous".
"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."AIG insures financial institutions around the world
The $165m was payable to executives by Sunday and part of a larger total payout reportedly put at $450m.
The $165m was payable to executives by Sunday and part of a larger total payout reportedly put at $450m.
House Financial Services Committee chairman Barney Frank said the bonuses were "rewarding incompetence".
New York Attorney General Andrew Cuomo now says he has issued legal papers demanding that AIG reveal the names of those receiving the bonuses - something which he says the firm has refused to do.
"These people may have a right to their bonuses. They don't have a right to their jobs forever," he said.
"When a company pays funds that the company effectively doesn't have, it's akin to a looting of a company," he said.
AIG has not yet commented on the legal move, but a spokeswoman said the firm was "in ongoing contact" with the attorney general.
'Outrageous'
'Outrageous'
AIG has received bailouts from the US government totalling $180bn (£127bn) since coming close to collapse in 2008.
AIG has received bailout payments from the US government totalling $180bn (£127bn) since coming close to collapse in 2008. AIG: QUICK FACTS 30 million US policy holdersOperates in 130 countriesProvides insurance to 100,000 companies and other entities
"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", said Mr Summers.
AIG boss Ed Liddy - who was installed by the government after the company got into trouble - earlier said the bonuses had to be paid to honour contracts signed before the financial crisis hit.
But he admitted that, despite the strength of feeling in the White House, there was little the administration could do to stop the bonus payments.
But Mr Liddy said bonuses for this year had been revamped and cut by as much as 30%.
AIG: QUICK FACTS 30 million US policy holdersOperates in 130 countriesProvides insurance to 100,000 companies and other entities
However, such concessions have done little to appease angry senators.
"The easy thing would be to just say... off with their heads, violate the contracts. But we are a country of law. The government cannot just abrogate contracts," he said.
Senate Republican leader Mitch McConnell said: "Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees?
Mr Summers said that Treasury Secretary Timothy Geithner had used all his power, both "legal and moral", to lower the payments.
"Particularly employees who got them into this mess in the first place? I think it's an outrage."
"I don't know why they [AIG] would follow a policy that's not really sensible, is going to ignite the ire of millions of people, and we've done exactly what we can to prevent this kind of thing happening again," said Austan Goolsbee from President Obama's Economic Recovery Advisory Board.
Indeed bonuses for 2009 are to be cut sharply - by up to 30% according to AIG boss Ed Liddy - but those agreed for 2008 will be paid.
Such concessions did little to appease angry senators.
"Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees?
"Particularly employees who got them into this mess in the first place? I think it's an outrage," said Senate Republican leader Mitch McConnell.
Democrat Elijah Cummings was equally incensed: "It's like, OK, you got to help me screw you. And by the way I'm going to take your money and I'm going to slap you with it."
Democrat Elijah Cummings was equally incensed: "It's like, OK, you got to help me screw you. And by the way I'm going to take your money and I'm going to slap you with it."
Are you in America? Should AIG pay out bonuses? Are you an AIG executive? Send us your comments using the form below
In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below.
