On Wednesday, Edward Liddy, chief executive officer of American International Group Inc. testified about why the insurance firm, which has accepted more than $170 billion in bailout funds, paid $165 million in bonuses to its employees during the past week.
Many of the bonuses were given to employees of AIG’s financial products division, the group that dealt with credit default swaps, which are the financial vehicles that contributed to the firm’s near demise. Responding to a public backlash against AIG, President Obama this week called the bonuses an “outrage” and asked Treasury Secretary Timothy Geithner to “pursue every single legal avenue to block these bonuses.”
