The head of battered insurance giant AIG told Congress on Wednesday that "we've heard the American people loudly and clearly" in their rage over executive bonuses, and he appealed to employees to return at least half the money.



Testifying under oath at a congressional hearing as intense as any in recent memory, Edward Liddy said some workers already have stepped forward to give money back.



The company became the target of a political firestorm after the disclosure over the weekend that it had paid $165 million in "retention bonuses" to its employees at the same time it was accepting bailout funds from U.S. taxpayers. Some of the payments were made to the same traders and executives whose risky financial behavior caused the company's near collapse.



Meanwhile, President Barack Obama said Wednesday he wants legislation to give the federal government vast new powers over financial institutions like AIG to protect the public.



Obama, speaking to reporters at the White House, said the powers would be similar to those now exercised over banks by the Federal Deposit Insurance Corporation. It would be part of the administration's broader package of new finance regulatory steps, he said.



Since AIG is an insurance company and not a bank, it is not subject to the same oversight.



"We've got a big mess that we're having to clean up," the president said. "Nobody here drafted those contracts" that resulted in the bonuses being paid out to AIG employees, he added.





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