Tim "Turbo Tax" Geithner Says AIG Will Cover The Bonus Money

Bumped: This broke late last night/early this morning but it's a big story so I'm moving it up so everyone can see it.

Considering they are, you know, broke, 80% owned by the government and already have about 160 billion in taxpayer money, I'm not sure how this works but okay I guess.

The Treasury Department will order embattled insurance giant American International Group Inc. to repay U.S. taxpayers up to $165 million that the company is giving employees as bonuses, Treasury Secretary Timothy Geithner said late Tuesday.

Acknowledging "considerable outrage" about the bonus payments, Geithner said AIG will pay the Treasury an amount equal to the payments, and the Treasury will deduct that amount from the $30 billion in government assistance that will soon go to the company.

"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.

So they are paying us back by taking less of our money to replace the money we gave them that they already handed out in bonuses? Isn't this the kind of accounting that created problems in the first place?

Okay, so it's a bit of a shell game but at least it will head off some dumb ass law aimed specifically at the people who got the money. It also shows that Obama may have wanted to stoke the populist flames on this but Republicans were likely having some success hitting him with the whole 'you either knew about it and did nothing or you were too stupid to have read the fine print' stick and he wanted it gone.

posted by DrewM. at 09:21 AM

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