After news of the AIG bonuses broke, Geithner held to the line that they didn’t know about the payments until March 10, just a little while before you and I did. And, lo and behold that’s what Bernanke is saying now:
Bernanke: I knew that there were general compensation packages throughout the company. I did not know, I was not informed about the specific payments to AIGFP.
Garrett: If you had that information would that have been germane to your discussions?
Bernanke: It would have given us more time to talk, negotiate, and look for options, but frankly we still would have faced the same legal obstacles we are currently facing.
But AIG CEO Edward Liddy greenlighted a round of bonuses of some sort on September 18, at a time when both men were already deeply involved in AIG, and last week he said that Bernanke had known about the payments for three months.
Late Update: Video embedded above.