Treasury Secretary Tim Geithner says his department is working with the U.S. Department of Justice on recouping the AIG Financial Products Corp. unit executive retention bonuses.
Justice is helping Treasury determine what avenues can be used to get the money back from American International Group Inc., New York, AIG Financial Products’ parent company, Geithner writes in letters sent to House Speaker Nancy Pelosi, D-Calif.; Senate Majority Leader Sen. Harry Reid, D-Nev.; Senate Minority Leader Sen. Mitch McConnell, R-Ken.; and House Minority Leader John Boehner, R-Ohio.
To ensure taxpayers are compensated for any bonuses that cannot be recovered, the government “will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the [$165 million] retention awards just paid,” Geithner writes.
Moreover, “we will deduct from the $30 billion in assistance an amount equal to the amount of these payments,” Geithner writes.
The larger is issue that, under current law, federal officials lack the authority to take control of non-bank financial institutions, Geithner writes.