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Lawmakers Urge Leading Financial Firms to Payback 'Questionable Bonuses'
Friday, July 30, 2010

A group of Washington lawmakers has formally called upon six major financial firms to halt executive bonus compensation and return what they term "questionable bonuses."

The move comes after Kenneth Feinberg, the special master for executive compensation, issued a report identifying 17 banks that together paid $1.58 billion in bonuses after accepting billions in taxpayer aid from the Troubled Asset Relief Program (TARP).

The group of 40 Democratic House members, led by Rep. Peter Welch (D-VT) sent letters on July 29 to the chairmen of six of the firms on Feinberg's list that have yet to fully repay outstanding TARP loans.

In the letters to the heads of AIG, CIT Group, Citigroup, M&T Bank, Regions Financial and SunTrust Banks, the lawmakers urge the companies to halt all bonus compensation until they have repaid all TARP money and to return bonuses that were "made possible through taxpayer funded lifelines."

"We are extremely disappointed to learn that Kenneth Feinberg has identified your company as one of 17 troubled banks that paid out questionable bonuses immediately after accepting 2008 taxpayer assistance that helped prevent the failure of your institution," the letter reads. "Further, it is our understanding that your bank may be preparing to again pay excessive bonuses to your executives in spite of the fact that you have not yet fully repaid the taxpayer."

A full copy of the letter is posted on Rep. Welch's House website.






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