WASHINGTON - Under intense pressure from the Obama administration and Congress, the head of bailed-out insurance giant AIG declared Wednesday that some of the firm's executives have begun returning all or part of bonuses totaling $165 million.
Edward Liddy, brought in last year to oversee a company that has received $182 billion in federal bailout funds, offered no details. Buffeted by congressional outrage, he said he was angry, too, but did not respond directly when advised in pungent terms to pay to the Treasury all the money handed out last weekend in 'retention payments.'
'Eat it now. Take it out of your profits down the road. It's a lot sweeter now than it's gonna be later,' said Rep. Gary Ackerman, D-N.Y.
Liddy slid into the witness chair at a congressional hearing as President Barack Obama sought anew to quell a furor that has bedeviled his administration since word of the bonuses surfaced over the weekend.
Obama, who took office just under two months ago, told reporters his administration was not responsible for a lack of federal supervision of AIG that preceded the company's demise, nor for the decision made last year to pay what he called 'outrageous bonuses.'
Still, he said, 'The buck stops with me.' He said 'my goal is to make sure that we never put ourselves in this kind of position again,' and he disclosed the administration was consulting with Congress on the possibility of creating a new agency to govern the meltdown of large financial institutions such as AIG.
He also gave a strong vote of confidence to Treasury Secretary Tim Geithner, who has been the target of growing Republican criticism.
Obama spoke as congressional Democrats worked on legislation designed to recoup most or all of the $165 million by exposing it to new taxes. A House vote was likely Thursday on a bill placing a 90 percent tax on the payments to top-paid executives at companies like AIG that received large bailouts from the federal government.
Republicans raised pointed questions about the extent of Geithner's advance knowledge of the bonuses, and stressed they had been locked out of discussions earlier this year when Democrats decided to jettison a provision from legislation that could have revoked the payments.
'The fact is that the bill the president signed, which protected the AIG bonuses and others, was written behind closed doors by Democratic leaders of the House and Senate. There was no transparency,' said Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee.
Liddy's presence in a congressional hearing room was evidence of a bipartisan opposition to the bonuses, although his status as a $1-a-year CEO called out of retirement last year to try to untangle AIG's financial mess made him a less-than-easy target for expressions of outrage.
Liddy said that on Tuesday, he had 'asked those who have received retention payments in excess of $100,000 or more to return at least half of those payments.' Some have 'already stepped forward and returned 100 percent,' he added.