Geithner defends bonus language in bill

March 19, 2009 at 9:24 PM
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WASHINGTON, March 19 (UPI) -- U.S. Treasury Secretary Timothy Geithner Thursday said his department requested executive pay language in the stimulus bill that led to controversial bonuses.

Also Thursday, New York Attorney General Andrew Cuomo announced he has received a list of executives who received so-called retention payouts at American International Group Inc., the troubled insurance giant at the center of the controversy.

As a U.S. Treasury investigator examined the department's role in AIG's award of millions in bonuses while getting federal bailouts, Geithner told CNN his department requested that the stimulus package include language protecting the payouts due to concern that legislation restricting payments might not survive a court challenge.

"But we also worked with (Senate Banking, Housing and Urban Affairs Committee Chairman Chris Dodd, D-Conn.) to strengthen the overall framework, and his bill has this very important provision we're relying on now to go back and see if we can recoup payments that were made that there was no legal ability to block."

The investigation by Treasury Inspector General Eric Thorson is one of several official inquiries into the AIG bonus uproar, ABC News reported Thursday. The probe was requested by Sen. Charles Grassley, R-Iowa.

Cuomo issued a statement late Thursday saying AIG Chairman Edward Liddy had supplied a list of AIG financial products division employees who received retention payouts. Cuomo said his office will work with AIG to determine which employees chose to return payout money, and he said officials would be "sensitive" to personal security concerns involved in publicly identifying executives.

"The Attorney General's Office is a law enforcement agency and is experienced in making these assessments," the statement said.

Neil Barofsky, special inspector general for the Treasury Department's Troubled Asset Relief Program, told a House committee hearing he was undertaking his own audit to examine who in federal government "knew what, how, when and why" about AIG's $165 million bonus program.

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