Obama slams 'greedy' AIG executives

Published: Tuesday, 17 March 2009, 7:35AM

President Barack Obama has slammed the huge bonuses paid to greedy AIG executives in a blistering attack on the US insurance giant.

Mr Obama is blocking the $165 million (£117m) being paid to employees of the firm which is now almost 80 per cent owned by the state.

AIG, which sponsors Manchester United football club, went cap in hand to the US government for help and was given almost $180 billion (£128bn) in bail-out cash, causing outrage.

Washington was forced to step in amid concern that if allowed to fail, AIG's collapse would have far-reaching consequences, deepening the global recession.

In an angry statement, Mr Obama said the company's financial problems were the result of "recklessness and greed".

The bonuses relate to money to be handed out to around 400 employees of AIG Financial Products and is part of a larger payout of around $450 million (£319m).

Mr Obama indicated that his administration is working with new AIG chief executive Edward Liddy to address the issue.

He said: "This is a corporation that finds itself in financial distress due to recklessness and greed.

"Under these circumstances, it is hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?"

He continued: "This isn't just a matter of dollars and cents. It's about our fundamental values. All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses.

"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules. This is an ethic we must demand."

Mr Obama added: "What this situation also underscores is the need for overall financial regulatory reform, so we don't find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions, so we have greater authority to protect the American taxpayer and our financial system in cases such as this."

AIG spokeswoman Christina Pretto said: "We are in contact with the attorney general and will of course respond to his request."

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