US recoups AIG bonuses

US Treasury Secretary Timothy Geithner will cut AIG’s bailout cash by the amount of the bonus paid to employees in a division blamed for much of the company's troubles.

In a letter to House Speaker Nancy Pelosi Geithner, he said the Treasury will take $165m from the latest $30bn of government aid. The government also will require AIG to make a separate $165m "commitment to pay" Treasury through cash flows from its operations.

Geithner said the Treasury had begun working with the Department of Justice to explore ways to recoup bonus payments made to employees in AIG's financial products division, but wanted to enact additional measures to insure taxpayers are compensated for unrecoverable funds.

Geithner also said the government plans to explore ways to "accelerate" the process of winding down the insurance giant's operations.

Lawmakers were also considering taxing the payments at very high rates.

Other AIG news

• Several sources reported that AIG staff were sent death threats and hate mail and that armed guards stood watch outside the firms' offices.
• The Times said that 11 AIG workers who received retention bonuses of $1m or more had already left the company.
• The Mail reported that a US Republican senator Charles Grassley said the failed AIG bosses should kill themselves over the company's collapse. In a radio interview he said: “The thing that would make me feel better is if they'd follow the Japanese example and come before the American people and take that deep bow and say, ‘I'm sorry’, and then either do one of two things: Resign or go commit suicide. And in the case of the Japanese, they usually commit suicide before they make any apology.”