Summers: AIG bonuses 'outrageous'

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By Martin Crutsinger ASSOCIATED PRESS

UPDATED:

"Outrageous."

That's what Lawrence Summers, director of the National Economic Council, called the $165 million in new bonuses to be paid out by the troubled insurance giant American International Group, which has received more than $170 billion in public bailout funds.

Members of both parties joined Mr. Summers on Sunday morning in criticizing AIG, which posted a loss of $61.7 billion -- the largest corporate loss in history -- during the fourth quarter of last year.

Rep. Barney Frank, Massachusetts Democrat and chairman of the House Financial Services Committee, said the AIG leaders who approved the bonuses shouldn't stay in power.

Senate Minority Leader Mitch McConnell, Kentucky Republican, said the payments do little to boost public confidence.

"This is an outrage," Mr. McConnell said. "And for them to simply sit there and blame it on the previous administration or claim contract -- we all know that contracts are valid in this country, but they need to be looked at."

AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company.

Treasury Secretary Timothy F. Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.