Obama fails to halt AIG's $165m bonus payments

[Bhaisahab]

Source: The Independent

Barack Obama's crusade against excessive Wall Street pay has hit an obstacle, with his administration admitting that it could not stop the nationalised insurance giant AIG from paying $165m (£118m) in bonuses.

AIG has received $170bn in government money since being saved from bankruptcy in September. The bulk of the bonuses will go to employees in the very business division that wrecked the company's finances.

Politicians have reacted with fury. Members of the administration took to television studios yesterday to insist that contracts written during the boom times had left their hands tied.

Larry Summers, the president's chief economic adviser, said: "The whole situation at AIG is outrageous. What taxpayers are being forced to do is outrageous." But he added: "We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken."

Mr Obama, who said paying bonuses was "shameful" while companies were on government life support, has found changing Wall Street culture to be more difficult than anticipated.

Read more: http://www.independent.co.uk/news/world/americas/obama-fails-to-halt-aigs-165m-bonus-payments-1645749.html

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This is daylight robbery. It's so blatant it makes one's blood boil!