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Outrage grows over AIG bonuses

March 17, 2009 by  

Outrage grows over AIG bonuses News that the troubled insurance giant AIG has paid multimillion dollar bonuses to its staff as the company was being bailed out by taxpayers has prompted calls for an investigation.

According to newly released information by New York Attorney General Drew Cuomo, AIG paid 73 employees bonuses of more than $1 million. The largest bonus paid was $6.4 million and seven more people received more than $4 million each.

In total, the company paid $165 million in bonuses and compensation, including to traders at its financial products division whose activates contributed to the near-collapse of the financial system.

In the last few days, Congress and President Obama have been firing a barrage of criticism at the AIG management and publicly discussing ways of blocking the bonuses.

Senate Majority Leader Harry Reid announced today that he will propose a tax on the money so that the "recipients of those bonuses will not be able to keep all their money – and that’s an understatement," according to CNN.

To date, American taxpayers have provided some $170 billion dollars in bailout funds to keep the company from collapsing. AIG also received an $85 billion loan from the Federal Reserve.

AIG lost $62 billion dollars in the fourth quarter of 2008 while holding more than 74 million insurance policies in 130 countries, which suggests the possibly catastrophic impact of the company’s troubles for the financial security of its customers and the economy at large
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