Updated from Monday, March 16
President Barack Obama on Monday lent the most authoritative voice yet to the growing chorus of government officials critical of American International Group's (AIG) award of about $165 million in federal bailout funds as bonuses to executives.
Obama, speaking at a White House gathering of small business owners, said he directed Treasury Secretary Timothy Geithner to pursue "every single legal avenue" to block AIG from awarding the bonuses. The federal government controls some 80% of the giant insurer after pouring in more than $170 billion in bailout funds to stave off its collapse since September.
"This is a financial company that finds itself in distress due to recklessness and greed," Obama said. "It's hard to understand how derivative traders warranted any bonus -- how do they justify this?"AIG reported this month that it lost $61.7 billion in the fourth quarter of last year, the largest corporate loss in history. AIG has argued that it contractually obligated to pay the bonuses. "This isn't about dollars and cents, it's about our fundamental value," Obama said.
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