AIG in a fresh imbroglio over bonuses

06 May 2009

American International Group, which stoked popular outrage for distributing large retention bonuses funded by a federal bailout, has once again given taxpayers something to grumble about.

The troubled company now says it paid employees $454 million in bonuses for work performed in 2008 – a massive increase from the $120 million it claimed to have paid out in March.

The company revealed this in response to detailed questions from Democratic Representative Elijah Cummings.

Cummings told Politico, which first reported the story, that he was shocked to see that the number had nearly quadrupled this time. "I simply cannot fathom why this company continues to erode the trust of the public and the US Congress, rather than being forthcoming about these issues from the start," he told Politico.

These numbers are in addition to the $165 million in retention bonuses paid to employees of a division of the company known as AIG Financial Products. The disclosure of those payments triggered a political wildfire earlier this year.

Earlier this year, chief executive officer Edward Libby told a House financial services subcommittee that the amount was "in the range of $9 million", while AIG spokesman Nick Ashooh said a few days later it was $120 million.

Now with the total pushing half a billion, AIG defended the revised figure in a statement.