Grassley seeks review of Treasury Department involvement in AIG bonus decision
WASHINGTON --- Senator Chuck Grassley has asked the watchdog for the Treasury Department to investigate the role that Treasury Department officials played in the decision by American International Group, AIG, to spend $160 million on bonuses to AIG employees after taking $170 billion in rescue money from taxpayers.
The details of Grassley’s request of Eric Thorson, the Inspector General for the Treasury Department, are included in a letter sent last night. The text is below.
March 17, 2009
The Honorable Eric M. Thorson
Inspector General
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Dear Inspector General Thorson:
I am writing to ask you to initiate an inquiry, in whatever form you believe most
appropriate, into the role, if any and actions of the Department of the Treasury (Department) in
the decision by American International Group (AIG) to pay bonuses of over $160,000,000 to
AIG employees. AIG is largely funded and controlled by the U.S. Government, after having
incurred massive losses from ill-conceived and executed investments and transactions. Indeed,
AIG received more than $170 billion in government rescue funds and I am concerned to see
taxpayer money being used to pay bonuses to employees associated with these massive
problems.
I request that you, among other things:
• determine the terms by which the Department provided funding to AIG, and particularly
whether or not Treasury officials made any effort to forestall payments of bonuses or
demanded waivers of bonuses prior to releasing any taxpayer funds;
• determine when the legal obligations were incurred; and
• whether these bonuses are compelled by contracts between AIG and its employees.
In so doing, I request that you obtain and analyze such contracts and determine how the
obligation to pay bonuses is established, for example by individual performance or overall
corporate performance.
In addition, it has been reported that the Treasury Department and the Federal Reserve
took every legal step possible, but unfortunately were unable to stop AIG’s decision to pay out
the bonuses. As it appears that the Department’s Office of General Counsel and others, were
largely involved in these matters, I believe it is appropriate that you obtain the information I am
seeking.
I appreciate your cooperation and assistance in getting the facts regarding this troubling
matter.
Sincerely,
Charles E. Grassley of Iowa
United States Senator
Ranking Member of the Committee on Finance
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