Geithner says AIG must pay back bonuses

U.S. Treasury Secretary Timothy Geithner on Tuesday said taxpayer bailout recipient AIG would be forced to pay the government to compensate taxpayers for $165 million in employee bonuses as a condition for receiving a further $30 billion in government funds.

"We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid," Geithner said in a letter to congressional leaders.

He also said the Treasury would deduct $165 million from the already planned $30 billion increase in insurer American International Group's <AIG.N> federal bailout.