WASHINGTON (Reuters) - President Barack Obama’s pay czar on Wednesday predicted the issue of hefty bonuses for AIG (AIG.N) employees would end in March and denied a Republican claim that the firm outmaneuvered the Obama administration.
“It ends this March with the last of these retention payments. These are the old grandfathered payments,” pay czar Kenneth Feinberg told ABC’s “Good Morning America” program. “Another month or so, these old, guaranteed bonuses will be a thing of the past.”
American International Group Inc, which was bailed out with a $182.3 billion U.S. aid package, is expected to pay out another round of employee bonuses on Wednesday worth about $100 million, according to the Washington Post.
The payout is part of a previously known $195 million award that was due to employees of the AIG Financial Products unit.
The latest awards have drawn fire from Republicans in Congress, including Sen. Charles Grassley of Iowa, the top Republican on the Senate Finance Committee, who said AIG “outmaneuvered” the Obama administration and now has taxpayers “over a barrel.”
Feinberg firmly denied the accusation.
“We are not being outmaneuvered,” he said. “These AIG bonuses were signed into law years ago. What I’m trying to do now is maximize whatever leverage we have to get as much of that money back and — to use Senator Grassley’s word — to maneuver AIG to pay back what it said it would pay back.”
Feinberg said AIG was “working hard to try and reduce the size of these bonuses” while moving to repay $45 million in previous bonus payments.
“It’s a lot of money. It is understandably frustrating. But understand what AIG is at least trying to do, this new regime at AIG,” Feinberg said.
“Thirty-nine million of that $45 million is being returned to the Treasury and to the taxpayer. There’s still $6.7 (to) $7 million to go, but we are insisting that money be repaid,” he told ABC.
“We’ve got to work as best we can to get as much of this money back as we can. And frankly, we’re doing a very very good job I think in getting as much of this money back as we can pursuant to the rule of law.”
Reporting by David Morgan, editing by Maureen Bavdek