Treasury Secretary Timothy Geithner will move to recoup taxpayer funds provided to American International Group in the amount of the $165 million that the company provided in retention bonuses to employees. The recoupment, as well as an additional penalty, was described last might in identical letters sent to the top bipartisan Congressional leaders. Geithner plans to use the leverage of a new payment of $30 billion being provided to AIG to extract the money, he said in the letter.“As part of our provision of recently announced taxpayer funds, we will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,— Geithner wrote. “In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments.—Geithner wrote that government attorneys had concluded that it would be “legally difficult— to stop the AIG payouts. But he said AIG Chief Executive Officer Edward Liddy had committed to scrapping or reducing hundreds of billions in additional bonuses due this year and beyond. Liddy is set to appear on the Hill this morning before the House Financial Services Committee, where he is expected to be grilled by lawmakers over the bonuses.Lawmakers have expressed outrage over the payouts and put forth numerous proposals to get the money back, including through taxation.According to an administration timeline of events, Geithner waited two days to inform the White House about the compensation to employees. Though the agreement to pay the bonuses was struck last April, Geithner first learned of them last Tuesday. He called Liddy on Wednesday to express outrage and directed Treasury lawyers to look for a way to prevent the payout.Geithner on Thursday informed the White House. Later in the day, senior aides told President Barack Obama. On Friday, Geithner secured from Liddy cuts in the bonuses. And, on Sunday, Obama asked “the economic and legal team to continue looking for ways to recoup the bonuses,— according to the timeline.