AIG Bonus Battle

There wasn't much that AIG CEO Edward Liddy could do to ease the attacks from members of both parties over big money bonuses, but he tried his best at a House hearing.

Liddy denounced the bonuses as "distasteful," and then told lawmakers he was asking employees of the AIG Financial Products unit to return at least half of their bonuses, if not all.

"Some have already stepped forward and offered to give up 100 percent of their payments," Liddy told lawmakers.

But that offering wasn't enough to slow down members of both parties who were looking for blood from a CEO who is making $1 a year.

"Let me be clear, we want the money back," said Rep. Judy Biggert (R-Illinois.)

"I take offense," Liddy said to Rep. Stephen Lynch (D-Mass) during one testy exchange.

"Well, offense was intended, you take it rightfully, sir," Lynch shot back, as they dueled over the meaning of the bonus provisions in AIG contracts.

The details of those contracts showed that AIG employees would get their bonus payments no matter what, whether their Financial Products unit made money or lost money.

Liddy repeatedly refused to reveal the names of those employees who got the bonuses, as Committee Chairman Rep. Barney Frank (D-Mass) made clear he would subpeona AIG for the information.

Liddy said he was worried about the safety of his workers, noting threats the company had already received.

"All of the executives and their families should be executed with piano wire around their necks," read one.

So what now?

Liddy did give the news media some good stuff to chew on in terms of the time line of this bonus debacle, as he said he found out about the bonus schedule back in September or October of last year.

He had discussed it with Federal Reserve officials and some lawmakers, who urged him to short circuit the bonuses, a move that Liddy ultimately rejected, over legal concerns.

"Did you expect it would touch a nerve with the American people, as it has?" asked Rep. Michael Capuano (D-Mass.)

"Absolutely," Liddy replied, though he acknowledged he didn't think the outrage would be as furious as it has been.

Today the House will vote on a bill that would levy an up to 90% effective tax on the AIG bonus money - for those who keep it.