The payment of bonuses in AIG triggered a political storm for Barack Obama

A White House official said on Monday that the Treasury Department would use a planned injection of $ 30,000 million to appeal to American International Group Inc. (AIG) to repay the $ 165 million which they squandered to the executive branch responsible to bring the company to the brink of bankruptcy.

The infusion of capital announced on March 2, will not be completed until AIG and Treasury Department agree to a repayment plan, said the source. The subsidies granted by the financial services group “were considered unacceptable, considering that AIG is surviving thanks to taxpayers’ money,” he added.

The U.S. president, Barack Obama, in an attempt to contain a political storm, directed the Secretary of the Treasury, Timothy Geithner, to “exhaust all legal channels” to block the delivery of the $ 165 million in bonuses.

“This is a corporation that is mired in financial trouble due to the irresponsibility and greed,” Obama said before announcing a plan to save small businesses through a new set of loan options.

“Under these circumstances, it is difficult to understand how brokers from AIG deserve some kind of bonus, not to speak of U.S. $ 165 million in additional payments. How do you justify this atrocity to taxpayers who are keeping the company afloat .. . This is not a question of dollars and cents. It questions our fundamental values, “he said.

It is not clear what legal options the government may appeal to stop the payment of bonuses.

Andrew Cuomo sent a summons to the insurer on Monday afternoon after the company did not disclose the names of those who had received bonuses.

On Monday morning Cuomo had requested the names of the recipients of the subsidies, their jobs and their performance evaluations in 2008, besides the names of those involved in designing the retention plan.

In a letter, Cuomo gave the company until 4.00 pm to respond to your request for information. His office has been investigating AIG bonuses since the end of last year. “Coverup of the details of these payments breeds more cynicism and mistrust in our already shaken financial system,” he wrote in the letter.

Cuomo said it is considering whether any of the persons who received payments was involved in the events that brought the insurance company to the verge of collapse and if the contracts could be void due to fraud or other reasons and whether the payments could be considered fraudulent transfers under state law.

A challenge for Obama

The announcement of the bonuses of AIG has become a critical test for Obama. If indignation seizes the electorate, it may become impossible to obtain additional funding to Congress which the government may need for another rescue.

For weeks, Obama has tried to project himself as a champion of ordinary Americans, not Wall Street, even as he is trying to explain everybody why they might need additional funds for banks in trouble. Monday was supposed to be devoted to the presentation of a plan to assist small businesses.

But that message is being buried under the furor generated by AIG bonuses. Rather than reduce that discomfort, Obama has decided to show solidarity. “Throughout the country there are people who work hard and meet their responsibilities every day, without benefit of government bailouts or subsidies of millions of dollars. And all we ask is that everyone from the average citizen to Wall Street and the government, to play under the same rules, “said the president.