Just recently, NY Times published the resignation letter of AIG’s Financial Products Vice President Jake DeSantis addressed to AIG CEO Edward M. Liddy. This is why we came to know that DeSantis is actually quitting from AIG.

In the letter, DeSantis wrote: “It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:”

The reason of DeSantis’ resignation was likewise stated in the letter. He specifically mentioned: “But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.”

“Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you. Liddy both defended the bonus payments to Congress last week and told legislators he had asked for the bonus money to be returned–for the employees to “do the right thing,” DeSantis further stated.

AIG Bonuses have indeed created a strong public backlash when the company chose to use taxpayer money to pay off multimillion dollar retention bonuses every to those executives who were not with AIG anymore.

New York Attorney General Andrew Cuomo has disclosed that 73 AIG executives were paid more than $1 million each as bonuses by the ailing insurance company.

President Barak Obama and other law makers have publicly berated AIG for giving out bonuses to employees during the same time they asked Congress for bailout money.

White House Press Secretary Robert Gibbs was beleaguered with questions as to why the president did not block the payout when the company has just received $170 million worth of tax payer’s money.  He said that government lawyers are “looking through contracts to see what can be done to wrest these bonuses from their recipients.”

The President himslef is asking: “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

Congressional Democrats vowed last Tuesday that they would strip the AIG executives of their bonuses.

Recipients of these bonuses will not be able to keep all of their money,” says Senate Majority Leader Harry Reid.

House and Senate Democrats are looking at ways to tax up to 100% of the generous bonuses handed out to the employees of AIG.  Republicans are saying that Obama’s administration should have blocked the payout to the executives.

The bonuses were paid legally, part of a program that had been disclosed in advance in filings that American International Group Inc. made with the government. The contracts written in March 2008 guaranteed employees 100 percent of their 2007 pay for 2008, regardless of their performance.

New York Attorney General Andrew Cuomo has issued subpoenas for the employees who received the bonuses despite their possible roles in its collapse.  They will also be investigating whether the bonuses were legal because they were handed out despite knowledge that the firm was losing money and would have no means in covering the bonuses.  AIG reported this month that it lost $61.7 billion in the fourth quarter of last year and received over $170 billion in federal rescue funds.