The Post is pursuing the "what did they know and when did they know it" line about the AIG bonuses. This is misleading readers because it implies that top officials in the Obama administration (e.g. Treasury Secretary Timothy Geithner) were surprised by the bonuses.
Secretary Geithner oversaw the takeover of AIG by the Fed. It has been widely reported, that as president of the New York Fed, Geithner maintained close ties to the top executives of major banks. Geithner was certainly familiar with how these executives were paid and that it was standard practice for large bonuses to be issued.
Geithner never claimed that he ordered AIG to stop making bonus payments. Since he knew that it was the practice of firms like AIG to make large bonus payments, and he never told them to stop making these payments, then he effectively know that they would make large bonus payments.
The real story here is very simple. Geithner knew about the bonus payments at AIG from the day the government took it over. He just never cared. This sort of article by the Post is confusing a very simple situation, implying that there was some possibility that Geithner and other top officials did not know about the AIG bonuses.
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