Outraged Obama vows to block AIG bonuses

US:President Ba- rack Obama Monday ripped into bailed-out company AIG, vowing to block multimillion-dollar bonus payouts by the giant insurer as public anger builds against Wall Street excess.

The New York state attorney general meanwhile warned American International Group chief executive Edward Liddy of court action if he did not give details of the controversial bonus payout using taxpayer bailout money.

Conscious of the potential backlash as his administration readies new support for the financial industry, Obama said the planned bonuses for executives and traders at AIG were an “outrage.”

“This is a corporation that finds itself in financial distress due to recklessness and greed,” he said, in a rare flash of public anger, at a White House event with owners of small businesses.

“Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay,” Obama said, after details of the payouts emerged over the weekend.

“How do they justify this outrage to the taxpayers who are keeping the company afloat?” he said, adding half in jest that “I’m choked up with anger here” as his voice caught at one point.

On Sunday, administration officials said there was little that Treasury Secretary Timothy Geithner could do legally to stop the bonuses, because they were promised under AIG employment contracts before the insurer was bailed out. The latest bailout row will do nothing to improve the political environment for government support for Wall Street firms.

Washington, AFP