Congressman Gary Peters, D-Bloomfield Township, was startled when he learned top executives at insurance giant American International Group Inc. were receiving more than $165 million in bonus pay.

The company is just now bouncing back from near-bankruptcy after receiving more than $170 billion in federal bailout money, said Peters’ Press Secretary Cullen Schwarz.

Faulty investments put the company in a situation of financial crisis. Public outcry over the bonuses has been loud and swift.

The former Central Michigan University Griffin Endowed Chair introduced a bill in the U.S. House of Representative on Monday that would put a 60 percent surtax on bonuses worth more than $10,000 at any company in which the government owns more than 79 percent.

The bill would tax the entire amount of bonus money paid to AIG employees, the only company that currently falls under these guidelines.

“These bonuses are coming for the very people who helped bring AIG to its knees,” Schwarz said.

He said Peters constructed the bill to address a current financial problem and prevent incidents of bloated bonuses from becoming the trend.

It would recover money taken from the pockets of taxpayers, Schwarz said.

“We need to insure, moving forward, any company that receives taxpayer money faces greater restrictions,” he said.

Vigdis Boasson, a finance and law professor, said government funding should be taken very seriously, especially in terms of the startling economy.

Given that AIG was heavily backed in the stimulus package and is now using the money for internal priorities, she said, something needs to be done.

“The economic stimulus package money should be used to sustain the company, not to sustain bonuses,” Boasson said. “There are lots of talented people who are unemployed. If they are not happy with the salary, they need to go somewhere.”

Political science professor Larry Sych said he’s heard two sides to the AIG story.

While many blame bankers for the country’s financial problems, others say the AIG bonuses are more like commission. The employees may be earning the money coming to them, he said.

Sych said he spoke with Peters during his tenure as a Griffin Endowed Chair at CMU, and knows Peters has a background in financial service companies.

The bill’s timing is good, he said, but its introduction in the House is only the first step to any permanent action.

Schwarz said so far, Peters has received virtually unanimous support in making sure the bonuses are recovered.

“I think this is the most common sense and lawful way to do that,” he said.

metro@cm-life.com

E-mail the author: Heidi Fenton