Mar 18, 2009, 23:08 GMT
Washington - American International Group, under fire for paying 165 million dollars in retention bonuses using government bail-out money, is not the only government beneficiary to have spent its money that way.
As AIG head Edward Liddy faced criticism on Capitol Hill Wednesday, a federal regulator defended a payment by Fannie Mae, the mortgage finance firm seized by the government last year, of 4.4 million dollars to four top executives.
James Lockhart, director of the Federal Housing Finance Agency who spoke at a housing symposium in Washington, defended the practice of retention bonuses as a 'reasonable ... well-thought out plan,' Bloomberg financial news service reported.
Similar retention plans were in place for thousands of workers at Fannie and its sibling agency, Freddie Mac, according to a filing with regulators last month cited by Bloomberg.
Bonus payments by Freddie will be released in April.
Freddie lost more than 50.1 billion dollars last year and has so far requested 44.6 billion in aid from the Treasury Department. Fannie booked 58.7 billion dollars in losses last year and said it needs 15.2 billion dollars in federal aid to remain solvent.
In another bail-out bonus situation, Merrill Lynch, acquired by Bank of America in a government-backed rescue measure last year, reportedly had a 3.6 billion-dollar bonus pool in December, the New York Times reported, citing a court transcript.
Bank of America has received upwards of 160 billion dollars in government support and guarantees since the financial crisis began. New York State Attorney Andrew Cuomo is trying to force the bank to reveal the names and amounts of bonus recipients.
Last year, John Thain, the former head of Merrill Lynch, spent 1.2 billion dollars on redecorating his office even as his company lost more than 20 billion dollars. He resigned January 22 and vowed to pay back the redecorating costs.
Your Talkback on this Story