Reid says pursuit of AIG bonuses continues

WASHINGTON -- It might take a while longer, but Sen. Harry Reid vowed Tuesday that controversial bonuses paid to executives of the AIG insurance firm will be recovered.

"The issue is not over, and that is an understatement," said Reid, D-Nev.

He said pressure from legislation passed last week in the House and from New York Attorney General Andrew Cuomo have led some AIG employees to forfeit their money voluntarily.

"This is a start," Reid said. "I do believe that what we have done is important, and what we intend to do may be even more important."

But it might be April or later before the Senate takes up any bills dealing with the issue. The momentum generated by disclosure that American International Group had spent $165 million on bonuses and retention pay after receiving a federal bailout appeared to cool over the weekend.

Cuomo reported that 73 workers received bonuses of $1 million or more. All were in the financial products unit whose risky practices had brought AIG to the brink of collapse before the government stepped in.

All told, about 400 employees received bonuses, ranging from $1,000 to almost $6.5 million, according to documents the company supplied to the Treasury Department.

Within days of the initial disclosure, the House passed a bill that would impose a 90 percent special income tax on workers who collected more than $125,000 in bonuses from AIG and other big firms that received government rescue money.

Reid tried to bring up a similar bill late Thursday, but it was blocked by Republicans.

Over the weekend, President Barack Obama questioned whether taxing the bonuses would be constitutional and said he would not "govern out of anger."

When the Senate returned to work on Monday, Reid, the Senate majority leader, said senators would take up a national service bill this week, and debate a fiscal 2010 budget resolution next week.

That left up in the air how or when the Senate would act on AIG.

"Republicans have asked for more time to study the legislation, and they are entitled to that," Reid said.

On Tuesday, Reid said Finance Committee Chairman Sen. Max Baucus, D-Mont., was gathering proposals to address the bonuses.

"I have no problem with waiting for a few days to see what is going to happen in the Finance Committee," Reid said. "This is an issue that is simply not going to go away. We will stay on top of it.

"If we don't finish it today or tomorrow, it doesn't mean we can't finish it another time," he said.

In the meantime, Cuomo said AIG employees have agreed to return about $50 million of their bonuses. They include 15 people who received some of the largest payouts.

Sen. John Ensign, R-Nev., said he agreed the Senate should move at a deliberate pace. He had expressed reservations about taxing the bonuses but has not specified how he would act.

"I think taking some time and not rushing this through is exactly the thing to do," he said. "Most of the bad things we do around here we do too quickly."

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.