Summers: AIG exec bonuses 'outrageous'

WASHINGTON, March 15 (UPI) -- Millions of dollars in bonus payments to top executives of bailed-out U.S. insurance giant AIG are "outrageous," an Obama administration official says.

White House National Economic Council Chairman Lawrence Summers, appearing Sunday on ABC's "This Week," said the bonus plan by AIG, which has received $170 billion in taxpayer bailouts and posted a $62 billion loss in the fourth quarter, were unacceptable.

"It is outrageous," Summers said. "We are a nation of law, where there are contracts. And there is one other reality we have to recognize, which is that these companies have to be enabled to function, if the government is going to maximize the prospect of getting its money back."

Summers added, "Every legal step possible to limit those bonuses is being taken by (U.S. Treasury) Secretary (Timothy) Geithner and by the Federal Reserve system."

AIG will scale back the bonuses after criticism from the Treasury Department, a letter from AIG Chairman and CEO Edward Liddy to Geithner obtained Saturday by CNN indicated. In the letter, Liddy pledges to reduce 2009 bonus payments, which AIG calls "retention payments," by at least 30 percent.