TARP Watchdog Hits Treasury Handling of AIG Bonuses

The Treasury Department failed to monitor “explosively controversial” bonuses American International Group Inc. paid to executives before committing to pump another $30 billion into the insurer, said the chief watchdog of the U.S. financial rescue program. There was a “failure of communication” between Treasury and Federal Reserve Bank of New York officials regulating the bailed-out company, Neil Barofsky, special inspector for the Troubled Asset Relief Program, said yesterday in a report. Barofsky is scheduled to testify today at a House Oversight and Government Reform Committee hearing held by Chairman Edolphus Towns, a New York Democrat.