Updated from 2:35 p.m. EDT

Now we know where AIG's ( AIG) bailout money went, and we can see what a tangled web we've made of the international finance industry.

The speculation and innuendo is now fact. The biggest chunk of bailout funds handled by AIG went to foreign banks, with France's Societe Generale receiving $11.9 billion, Germany's Deutsche Bank ( DB) receiving $11.8 billion, Britain's Barclays ( BCS) receiving $8.5 billion, and Switzerland's UBS ( UBS) claiming $5 billion. In all, foreign banks received about $53 billion.

Many U.S. banks that already received direct taxpayer aid also benefited from the government largesse given to AIG, with Bank of America ( BAC) and Merrill Lynch collecting $12 billion in combined payouts from AIG, Goldman Sachs ( GS) getting $12.9 billion, and Citigroup ( C) claiming $2.3 billion.

So chalk one up to the home team for double-dipping. Meanwhile, the stock market seems to be pleased about all this, with AIG shares closing 33 cents higher at 83 cents.

I guess its good news that more than $105 billion in taxpayer funds provided to AIG (and the Maiden Lane III entity created by AIG and the Federal Reserve Bank of New York) flowed straight through to other banks and a few U.S. municipalities to meet various obligations for collateral related to credit default swaps and for securities lending operations.

Question to the municipalities that received $12 billion from guaranteed investment agreements -- what exactly were you doing with your taxpayer dollars? You are pretty darn lucky to get that money back.

Speaking of contractual obligations, AIG also felt compelled to pay $165 million in bonuses to its staff. I don't begrudge employees bonuses, mind you, but it seems rather hard to justify in the current environment. I'm sure employees at many other companies are going without bonuses these days.

But I digress. The millions in bonuses are chump change compared with the billions in previously hidden bailout funds that went to other banks, including many in Europe.

From the looks of things, AIG's counterparties got made whole on the deals. No matter how stupid or risky the transaction, AIG apparently felt compelled to cover the full value with taxpayer dollars. Did they have to? I'm not so sure. Without federal bailout funds, those contracts could very easily have been sorted out in bankruptcy court for pennies on the dollar at best.

On the other hand, making the banks whole could serve the public interest by shoring up the financial system. That sounds like a reasonable plan, except for the fact that the government had no clue any of this was going on until now.

The fact that lawmakers had no idea where this money had gone makes a mockery of the entire bailout. It's not so outrageous that AIG felt the need to make good on its contractual obligations, but that the insurer felt this information should be kept out of the public eye. Who's money did AIG think it was spending?

The best part about AIG's disclosures over the weekend, and bear in mind that these revelations involve actions taken between September and December, is that the insurer prefaced its release by saying it "recognizes the importance of upholding a high degree of transparency with respect to the use of public funds."

AIG certainly demonstrated how much it respects transparency.
Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.

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