A.I.G. Planning Huge Bonuses After $170 Billion Bailout

From this morning’s NYTimes.

The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

So, let me get this straight: the contract which must be honoured is such that it rewards employees for running the firm into the ground? At this point you really begin to wonder if the people who created this system ought to be sectioned under the Mental health Acts.