Justice Dept looking at AIG bonuses

WASHINGTON (Reuters) - The U.S. Justice Department is working with the Treasury Department to see how it might recover employee bonuses paid by embattled insurance giant AIG, Attorney General Eric Holder said on Wednesday.

“We’re working with the Treasury Department to make them aware of what legal abilities they have,” Holder told a news briefing. “We have people in the Justice Department in various divisions who are trying to examine what tools the Treasury Department has in that regard.”

American International Group Inc is at the center of a growing political firestorm for accepting up to $180 billion in government aid and then handing out $165 million in bonuses to executives.

Leading lawmakers have urged that Holder be enlisted to find a way to recover the bonuses. Treasury Secretary Timothy Geithner said on Tuesday the Justice Department was looking at whether provisions of the recent economic stimulus bill could be used to recoup the money.

The AIG controversy has become an emblem of the global financial crisis, along with fraud cases against players such as Bernard Madoff and Allen Stanford.

Holder said he intends to “reinvigorate” enforcement against white-collar crime, hiring more FBI agents and prosecutors dedicated to investigating financial fraud.

“And they’ll get more attention from the attorney general,” he said.

“The American people have a rightful expectation that this administration, this justice department, will be examining this financial crisis to see whether or not a component of that has to do with illegal, inappropriate, fraudulent activity.”

A more coordinated approach among government and local agencies was needed, Holder said, but he has not yet decided whether to form a national financial fraud task force, along the lines of a body that investigated the collapse of energy trader Enron.

Editing by John O’Callaghan