Some AIG bonuses already repaid, says CEO ahead of Congress vote

AIG CEOEdward Liddy, under intense fire from U.S. lawmakers and President Barack Obama over$165 million US in bonuses doled out to employees, said Wednesday that some executives have begun returningpartor all of their extrapayouts.

Liddy offered no details, and lawmakers were in no mood to wait. He was still fielding their questions when House Democratic leaders announced plans for a vote Thursday on legislation to tax away 90 per cent of bonuses paid to top-earning employees at AIG and other companies receiving big government bailouts.

New York Democrat Charles Rangel, who chairs the tax-writing House Ways and Means Committee, said Wednesday the tax would hit employees making more than $250,000 a year.

He said the $5 billion threshold for companies to be covered would exclude community banks and other smaller firms that have received bailout money.

The bill may be shooting at all bailouts, but it's targeted at AIG.

The head of the battered insurance company got an earful in Washington Wednesday as he fielded angry questions from politicians eager to hear why the company paid lavish bonuses to executives while receiving federal bailout money.

Liddy is not the ideal target for this rage. He took over the company in September, long after the compensation contracts were signed. And he's working for a salary of $1 annually for his role as CEO.

"Make no mistake, had I been CEO at the time, I would never have approved the compensation contracts put in place over a year ago," Liddy told the U.S. House financial services subcommittee.

But he nonetheless defended the payments, calling them necessary to fix what's ailing the battered insurance giant.

"Let me tell you why [these bonuses had to be paid]," Liddy said. "I'm trying desperately to prevent an uncontrolled collapse of the business."

"This is the only way to improve AIG's ability to pay taxpayers back quickly and completely," Liddy said.

'These bonuses are wholly unjustifiable.' Barney Frank, chairman of the House Finance Committee.

Liddy said he's asked AIG employees who had received more than $100,000 to return at least 50 per cent of those payouts.

Some have "already stepped forward and returned 100 per cent," he added.

Asked byMassachusetts RepresentativeBarney Frank whether he would turn over the names of individuals who received the money, as well as the amounts, he said he would do so only if assured the information not be made public.

When Frank said he might seek a subpoena, Liddy said he was concerned about the safety of the employees and their families, and read aloud from a death threat received by one of them.

Frank said he would be guided in part by security considerations, butNew YorkRepresentativeGary Ackerman later noted that Andrew Cuomo, the New York attorney general, was already seeking the names with a subpoena.

'Tidal wave of rage'

Congress members took turns expressing outrage at the company's awarding of more than $165 million in bonuses to executives, despite receiving billions in federal bailout money.

Calling the reaction to the payments "a tidal wave of rage across America," Ackerman said taxpayers are demanding accountability over Wall Street's greed.

Several drastic measures were suggested by committee members on Wednesday. Besides the clawback tax, some suggested pushing AIG into outright bankruptcy.

"It is time for us to assert our ownership on the situation," saidFrank. "These bonuses are wholly unjustifiable."

The bonuses range from $1,000 to nearly $6.5 million. Although no specific names of people receiving payments have been released, more than 73 employees received bonuses in excess of $1 million.

The bonuses were so-called "retention" bonuses designed to discourage employees from leaving for other firms, but at least 11 of the employees who received bonuses have already left the firm.