BUSINESS

Fed Failed To Tell Obama Admin About AIG Bonuses

04/18/2009 05:12 am ET | Updated May 25, 2011

Federal Reserve officials knew for months about bonuses at American International Group but failed to tell the Obama administration, according to government and company officials, exposing problems in a relationship that is vital to addressing the financial crisis.

As pressure mounted on AIG employees to return the bonuses, new details emerged yesterday about what the Fed, the Treasury Department and the White House knew regarding the payments and when. AIG executives said the Fed was informed by the company at least three months ago that by March 15 it would pay $165 million to employees working at its most troubled division. The Treasury and White House said they learned of the payments from Fed officials only days before they were due.

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