ObamaOdrama

Fox Business uncovers emails regarding the governments advance knowledge of AIG’s intent to provide bonuses.

In a Nov. 5 e-mail to a Treasury and Federal Reserve officials, who were under the Bush administration, an outside attorney working on the transaction wrote, “We indicated that UST (United States Treasury) … wants to put in place a limitation on annual bonuses that assure that (AIG: 1.2, -0.39, -24.53%) executives/employees will not be enriched out of TARP funds.”

But the e-mail indicates AIG officials pushed back on the proposal. In a section of the e-mail discussing proposed limits on severance packages for AIG employees, the attorney wrote, “They were slack jawed at the idea of imposing the restriction throughout the entire population, especially worldwide.” AIG proposed that Treasury apply such limits “to a class of partners and senior partners (700).”

At another spot in the e-mail, the attorney said about AIG executives, “They will think about ways to deal with the ‘no enrichment’ point. In this connection they again raised the size of the applicable group and kept coming back to ‘700’ as a meaningful, and possibly workable, group for limitations.”

The e-mail also indicates that in their deliberations, government officials were concerned about the effect of compensation on recruiting and retaining AIG employees.

“We also indicated that all parties understand that the restrictions must be designed so that the business can be operated in a reasonable way, including in terms of recruitment and retention of employees,” the attorney wrote in the e-mail.

The government eventually restricted compensation at AIG to just the top 75 executives.

How much longer can the government get away with throwing AIG under the bus to cover it’s own mistake?