US Treasury's Geithner: AIG must pay back bonuses

US Treasury's Geithner: AIG must pay back bonuses: "U.S. Treasury Secretary Timothy Geithner on Tuesday said insurer AIG would have to promise to compensate taxpayers for $165 million in employee bonuses as a condition for receiving a planned $30 billion expansion of its government bailout.

'We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,' Geithner said in a letter to congressional leaders.

In addition, the Treasury will deduct $165 million from that $30 billion in additional taxpayer funds announced for American International Group (AIG.N) on March 2, Geithner said.

The AIG bonuses, which were agreed early last year before the government moved to rescue the insurance giant, has ignited a furor on Capitol Hill. House of Representatives Speaker Nancy Pelosi said on Tuesday that legislation to recover the funds could come up within days.

The government, which now holds about an 80 percent stake in AIG, has moved to bail out the company three times, to the tune of up to $180 billion.

Geithner said the Treasury was working with the Justice Department to determine whether provisions of a recently passed economic stimulus bill covering compensation for bailout recipients might be useful in clawing back the bonuses."

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