AIG CEO Edward Liddy told the House Financial Services Committee today that the Federal Reserve had okayed his company’s planned bonuses in advance — and now Time magazine reports that the Treasury Department also knew about the ticking political time-bomb earlier than it has acknowledged.
As the magazine reports:
“Treasury staff was informed about the new bonuses in a Feb. 28 memo that the March 15 [bonus-payment] date was upcoming,” a Federal Reserve source tells TIME. A Treasury Department source, speaking on background, confirmed the e-mail memo and its contents, saying, “Everybody knew that [AIG] had a retention issue.”
When the debate comes down to a Nixon-style “what did he know and when did he know it,” things aren’t looking good. And we may have just reached that point for Treasury Secretary Tim Geithner.