Members of the House of Representatives subcommittee on capital markets were expected to give Liddy a mauling over his decision to pay out the 165 million dollars in bonuses despite the government's strong objections.

Following widespread outrage, Treasury Secretary Timothy Geithner said yesterday that AIG will be required to reimburse the government for the bonuses in order to get additional bailout funds.

In a letter to House Speaker Nancy Pelosi, Geithner said it was impossible to prevent the contractual bonuses from being paid and said it may be difficult to recoup the payments.

However, Geithner said the government would "impose on AIG a contractual commitment" to repay the 165 million dollars to taxpayers. And furthermore he said that the same sum would be deducted from the 30 billion dollars pending from AIG's bailout of more than 170 billion dollars.