WASHINGTON -- The chief executive officer of troubled insurance giant American International Group appeared on Capitol Hill today to answer questions about why the failing company spent millions on bonuses to employees after receiving billions in bailout money from the government.
Edward Liddy, the chairman of AIG acknowledged that the company's multimillion dollar bonuses to employees were "distasteful" to many Americans. He also added, "I share that anger."
"Mistakes were made at AIG on a scale few could have ever imagined possible," Liddy told a House Financial Services subcommittee.
But the AIG chairman also told the panel of skeptical lawmakers that the $165 million in bonuses should be honored as a legal commitment of the United States government.
"When you owe someone money, you pay that money back, " Liddy said. "We at AIG want to believe that we are all in this together."
In an editorial published in Wednesday's Washington Post, Liddy wrote,"the government rescue of AIG has produced a palpable wave of anger on the part of Americans. The anger is understandable and I share it."
Growing rage over mismanaged government bailout money intensified after New York's attorney general reported the insurance giant awarded $165 million in retention bonuses of $1 million or more for 73 employees, including eleven who no longer work there.
"We have to catch and punish all the crooks," said Rep. Steve Kagan, D-Wisc.
"Let the recipients of these large and unseemly bonuses be warned," said Sen. Charles Schumer, D-NY. "If you don't return it on your own, we'll do it for you."
Lawmakers now propose using taxes to get the bonuses back.
"Executives who run their businesses into the ground should not be rewarded for doing that," explained Sen. Charles Grassley, R-Iowa.
"Someone quite frankly has got to take these people to the woodshed," said Rep. Tim Ryan, D-Ohio.
Bipartisanship On The Issue -- Only To A Point
It is perhaps the first issue since the new Congress began that has unified Democrats and Republicans. However, that is not stopping lawmakers from pointing fingers.
"Two weeks ago, the president's spokesman said they were confident that they know how every dime was being spent at AIG," said Rep. John Boehner R-Ohio. "Well, clearly they didn't know what they were talking about."
Some critics argue the Treasury department should have known about the bonuses sooner.
"I know that Secretary Geithner last week engaged with the ceo of AIG to communicate what we thought were unacceptable bonuses," said White House spokesman Robert Gibbs.
Meanwhile, public outrage is penetrating the walls of AIG.
"Inside AIG, it is absolute chaos," explained David Cho of the Washington Post. "There are people that have gotten death threats. They have hired armed guards to watch over the place. Some people don't even want to come to work.
The Obama administration says it's working to put strict limits on how future government bailout dollars are spent.
Some lawmakers are urging them to pick up the pace.