NU Online News Service, April 1, 9:18 a.m. EDT
WASHINGTON–The federal government is undertaking a multipronged probe of the bonuses paid American International Group executives, including an initiative by the Department of Justice of the options available to recover the funds.
Disclosure of the multiple probes was made yesterday by Neil Barofsky, special Inspector General of the Troubled Asset Relief Program, in testimony on his oversight of the TARP program before the Senate Finance Committee.
He said that his office is coordinating with the DOJ on the options available to recover the bonuses paid AIG executives.
The government secured a 79.9 percent interest in AIG September of last year when it began extending billions in loans and credit to keep the firm afloat.
Mr. Barofsky also said his agency has an audit underway that seeks to determine the federal monitoring and enforcement of executive compensation restrictions imposed as a condition of federal financial assistance to organizations such as AIG.
As part of this audit, he said, "we will be looking closely to ensure that the bonuses to AIG employees are not inconsistent with AIG's legal or contractual obligations."
He said he also plans to report to Congress "the sequence of events" which led to the approval of these payments by government officials (including the general approval of retention payments in AIG's agreement with Treasury in November 2008 when Henry Paulsen was Treasury secretary).
"To the extent that we find that there were miscommunications among AIG, Treasury and Federal Reserve officials regarding these payments, we will make recommendations to ensure that all parties involved in TARP-related programs effectively communicate with one another," he said.
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