US President Barack Obama hit out today at the 'outrage' of executives at struggling insurance giant AIG receiving millions of dollars in bonuses.
In an angry statement, Mr Obama said the company's financial problems were the result of 'recklessness and greed'. As such it was hard to justify $165m in extra pay to executives, he said.
AIG has received more than $170 billion in bailout cash from the government. The insurer is now 80%-owned by the state as a result of attempts to prop up the struggling firm.
The US government stepped in amid concern that if allowed to fail, AIG's collapse would have far-reaching consequences, deepening the global recession.
Since being installed as president, Mr Obama has stressed the importance of firms being made to be accountable over money they receive from taxpayers.
It followed growing concern over the use of the first tranche of bailout cash, and public disgust over bonuses and other executive perks such as private jets.
The bonuses that sparked today's comments from the president relate to money to be handed out to around 400 employees of AIG Financial Products. The extra cash was agreed last year before AIG went cap in hand to the government.
The $165m due to be paid out this week is part of a larger payout of around $450m.
Mr Obama today indicated that his administration was working with new AIG chief executive Edward Liddy to address the issue.
'This is a corporation that finds itself in financial distress due to recklessness and greed,' he said. 'Under these circumstances, it is hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay'.
'How do they justify this outrage to the taxpayers who are keeping the company afloat?' 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,' he added.
Earlier it emerged that AIG passed on $22.4 billion worth of US government bail-out funds to other banks and financial firms.
France's Société Générale, Germany's Deutsche Bank and US investment bank Goldman Sachs were the top three recipients.
According to the company's figures, 13 of the top 20 pay-outs were made to firms not based in the US. Once among the world's largest insurers, AIG has received around $180 billion from the US government to keep it afloat.
The payments announced on Sunday related to contracts made by AIG's financial products branch - the division widely blamed for the company's downfall.
The payments were made between mid-September and the end of December on credit default swap contracts - complex financial products which are a type of debt insurance.
