What did Treasury staffers know, and when did they know it?

A new report suggests people inside the department knew that AIG was scheduled to pay out this round of bonuses as early as February.

Published March 19, 2009 12:25AM (EDT)

The Obama administration has, for the most part, said it was all but blindsided by this latest round of bonuses paid out by AIG, left uninformed until almost the last minute. But according to Time Magazine's Massimo Calabresi, at least some people within the Treasury Department were informed of the scheduled payouts as far back as Feb. 28.

Treasury Secretary Tim Geithner has told Congress he only learned of the payments on March 10th, and Calabresi's report doesn't dispute that, but it's pretty unflattering nonetheless.

"[A] Treasury Department official says the fault appears to lie with career staffers at the department who failed to report the imminent bonus deadline up the chain to Geithner," Calabresi writes. "This failure may be a by-product of the difficulty Geithner has had staffing up at Treasury. But he still has personal vulnerability on the issue. It was Geithner, as head of the New York Federal Reserve, who negotiated the AIG bailout last September. At that time, he could have sought to get bonuses repealed as part of the massive government loan."

It was employees of the New York Fed who reportedly informed Treasury the payments were imminent, even going so far as to warn them of the political import.

By Alex Koppelman

Alex Koppelman is a staff writer for Salon.

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