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AIG Chief to Face US Lawmakers Angry About Employe
Date: 3/18/2009 8:24:46 AM Sender: VOA News
AIG Chief to Face US Lawmakers Angry About Employee Bonuses  
By VOA News
18 March 2009
  
The top executive of American International Group faces tough questioning Wednesday from U.S. lawmakers angered by the troubled company＇s large employee bonuses.

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CEO of AIG Edward Liddy (2008 photo)

AIG chief executive Edward Liddy is due to testify on the issue at a hearing of the House of Representatives Financial Services Committee, which is currently under way.

Many U.S. lawmakers have expressed frustration with the insurance giant＇s decision to hand out $165 million in bonuses to executives while receiving federal bailout money.

Liddy said in an article published Wednesday in The Washington Post he "understands" public anger about the bailout of AIG and has a plan to return money to the government.

But he says AIG had to pay the bonuses to honor its contracts with employees and prevent them from quitting.

AIG handed out the bonuses to employees of its financial products unit, which made bad bets on risky mortgages and other assets that left the company near collapse.

Liddy says he found it "distasteful" to pay out the bonuses. He says he would not have authorized them had he been chief executive at the time they were negotiated more than a year ago.

U.S. Treasury Secretary Timothy Geithner has said AIG must compensate taxpayers for the employee bonuses as a condition for receiving a further $30 billion in government funds.

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AIG office building in New York, 17 Mar 2009

AIG has taken $170 billion in federal bailout money since the U.S. financial crisis erupted late last year.

Some lawmakers also have expressed anger about revelations that AIG used the bailout money to pay back European banks that invested in the company＇s risky practices.

Opposition Republicans have criticized Geithner for not acting more quickly to block the bonus payments, leading to speculation that President Barack Obama may replace him.

But White House spokesman Robert Gibbs told reporters Tuesday Mr. Obama continues to have full confidence in Geithner.

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