Audio: Click to hear Sen. Feingold on Newsradio 620 WTMJ's Wisconsin's Morning News

KENOSHA - Wisconsin Senator Russ Feingold is planning to talk to people in Kenosha Monday.  The chat was prescheduled, but it comes as Feingold is outraged about bonuses paid to American International Group executives.  The company is paying the $165 million in new bonuses despite the company's taking billions in federal bailout dollars.

"It doesn't make any sense," Feingold said.

Leaders of the White House economic team and the senate's top Republican are infuriated, and pledge to prevent such payments in the future.

"I want to make sure that every stone is unturned to find a way to prevent these bonuses from going to these people," Feingold told WTMJ's Jagler and Mueller.

In a letter to Treasury Secretary Timothy Geithner, Feingold wrote, "I would like to know what legal options have been explored for canceling the bonuses or recouping the money from the recipients."

"Some of the recipients of these bonuses may have been responsible for the practices that drove the company to the brink of collapse."

Feingold also expressed concern that the federal government currently owns 80% of the company, and believes Americans will question whether the executives "deserve this level of taxpayer-subsidized compensation."

AIG is handing these bonuses out after receiving a taxpayer bailout of more than $170 billion.

Just this month, the company reported a loss of $61.7 billion for the fourth quarter of last year -- the largest corporate loss in history.

The company's chairman says it entered into the bonus agreements in early 2008 before getting into severe financial trouble.

White House officials say the government determined it could not break those contracts after the fact.

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The following is a copy of Senator Feingold's letter.....

March 15, 2009

 
The Honorable Timothy Geithner
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC   20220

 
Dear Mr. Secretary:

I deeply troubled by reports that the American International Group (AIG) intends to pay about $165 million in bonuses to its executives.  As you know, the federal government has provided AIG with $170 billion in taxpayer money and currently owns 80% of the company.  I share your outrage that a company which has been bailed out by the taxpayers for its mistakes would turn around and pay its executives such a staggering sum of money.

Reports suggest that AIG’s chairman claims AIG is legally obligated to pay some or all of these bonuses.   I write to ask why any bonuses would be legally required, given the company’s abysmal performance.   In addition, I would like to know what legal options have been explored  for canceling the bonuses or recouping the money from the recipients, and in particular whether the Administration has considered holding AIG executives accountable in court for any breaches of their fiduciary duties to the shareholders.

Reports also suggest that AIG’s chairman claimed that the bonuses are needed to ensure the company can “attract and retain the best and the brightest talent to lead and staff the AIG businesses.”  Since some of the recipients of these bonuses may have been responsible for the practices that drove the company to the brink of collapse – jeopardizing the financial system – I am sure many Americans will question whether they are indeed “the best and the brightest” and whether they deserve this level of taxpayer-subsidized compensation.

I look forward to your prompt response.        

Sincerely,

Russell D. Feingold
United States Senator
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The Associated Press Contributed to this Report