Fed Chairman Considered Lawsuit To Stop Executive Payouts

By: Associated Press
By: Associated Press

WASHINGTON (AP) -- The Federal Reserve chairman says he'd wanted to stop a bailed-out company from handing out millions in executive bonuses.

Ben Bernanke tells Congress the AIG payments were "highly inappropriate" and he considered filing a lawsuit to stop them.

He says his legal staff talked him out of it. Bernanke later learned that a failed lawsuit could have forced the government to pay huge amounts in punitive damages.

Treasury Secretary Timothy Geithner also testified at today's House hearing. He was asked if there were similar big bonus payouts at other companies getting took taxpayer money.

Geithner said the practice "goes well beyond AIG." But he was noncommittal about presenting a list of the companies involved and bonuses paid.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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