President Barack Obama said Monday that he will seek â€œevery single legal avenueâ€ to block the payouts of $165 million in executive bonuses by American International Group, the insurance behemoth that taxpayers are spending billions to bail out.
Unleashing his criticism in the White House East Room at an event announcing new help for small businesses hurt by the recession, the president blamed AIGâ€™s financial woes on its executivesâ€™ â€œrecklessness and greed,â€ and asked, â€œHow do they justify this outrage to the taxpayers who are keeping the company afloat?â€
AIG is getting about $170 billion in taxpayer assistance and is now about 80 percent taxpayer-owned. Federal officials moved to save it last fall because they thought its failure would take down the global financial system since AIG insured the assets of so many major financial institutions.
Polls show that Obama has begun to face declining public support because of the economic crisis. With his criticism of AIG, he sought to separate himself from the excesses of those receiving taxpayer assistance and stand with taxpayers who are angered by the situation.
Obamaâ€™s remarks followed weekend reports about the AIG bonuses. He said that given the taxpayer assistance that AIG is receiving, he would asked Treasury Secretary Timothy Geithner â€œto use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.â€
It wasnâ€™t immediately clear what recourse the government has. Obama said that Geithner was â€œworking to resolve this matterâ€ with AIGâ€™s new chief executive, Edward Liddy, who began his job after the contracts were signed that led to the bonuses in question.
â€œThis is not just a matter of dollars and cents, itâ€™s about our fundamental values,â€ Obama said.
Even before Obamaâ€™s remarks, lawmakers of both parties expressed dismay at the bonuses. Senate Minority Leader Mitch McConnell, R-Ky., appearing Sunday on ABC News, called it â€œan outrage.â€
â€œWe all know that contracts are valid in this country, but they need to be looked at. Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees?â€
By Margaret Talev and William Douglas / McClatchy Tribune