After Using Federal Bailout Money To Award Massive Bonuses, AIG Is Now Using Public Funds to Sue the Government To Get Back $306 millions in Tax Payments Tied to Offshore Tax Havens

While Congress attempts to get back roughly $170 million in bonuses paid to executives at American International Group (AIG), AIG is suing the U.S. government (its largest shareholder) for $306 million in tax payments. Between bailouts, bonuses, and tax refunds, it is getting difficult to tell how has what amount of the public fisc.

AIG wants the government to return of $306 million in tax payments including some tied to its offshore tax havensin the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens. AIG had a reputation for fighting aggressively to prevent having to pay taxes to the country that ultimately bailed it out of its disaster. Presumably, some of the public bailout money is now being used to sue the government for past taxes.

As for the bonuses, the legislation has passed the house. I remain skeptical as I discussed on ABC News last night. While it is true that the court defer greatly to Congress on taxes, the intent to punish these executives was hardly hidden by the sponsors. I was lead counsel in the last successful bill of attainder case (Foretich v. United States in 2003) and I believe that there is considerable merit to a challenge to such a law. To that extent, as Steve Chapman discussed today in his column, I disagree with professors who insist that just framing it as a tax is sufficient to pass judicial review.

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