Edward Liddy

Edward Liddy, chairman and chief executive officer, conceded in testimony prepared for a hearing by a House Financial Services panel. "I share that anger, he said. AIG is under fire for $220 million in retention bonuses paid to employees in its troubled financial products division. The most recent payment of $165 million began to be paid last Friday and caused a furor.

Liddy told lawmakers that the company grew into an internal hedge fund that became overexposed to market risks. AIG is the largest recipient of federal government emergency assistance. It has received $170 billion in bailout help and the government holds a nearly 80 percent stake in the company. On the eve of the hearing in the House of Representatives Financial Services Committee, condemnations of AIG and the bonuses were coming fast and furious, with the matter for the most part dominating news in Washington.

AIG chief Liddy has asserted that bonuses the company paid were necessary to retain the best and brightest talent, an assertion he expressed directly to U.S. Treasury Secretary Timothy Geithner in a letter, adding that bonus contracts with employees were finalized well before Congress approved financial bail out funds in late 2008. In a congressional hearing on Wednesday, the CEO of American International Group, the troubled insurance company, will face tough questions from angry members of Congress.

Chris Dodd

Chris Dodd, in particular, over AIG bonuses that he gave only a cursory, half-baked review of the facts. As a headline read, "Caught Red Handed," Hannity almost completely ignored Senator Dodd's explanation for the "bonus protection" he supposedly placed in the stimulus bill and all but declared Dodd responsible for the bonuses. With video.

At the beginning of tonight's Hannity, he announced, "Democratic Senator Chris Dodd slipped an amendment into the stimulus package last month that protected bonuses agreed to before February 11, 2009, meaning the AIG bonuses, and Senator Dodd tells FOX News this evening that he wasn't responsible for - well, the February deadline.

What Hannity never explained (and there was no balancing guest on the show), is that Dodd's original amendment did not include protection for bonuses. Indeed, as Media Matters notes, it included restrictions on executive compensation. The amendment was later modified in conference and put into the final bill with that modification. Dodd says it occurred without his knowledge. Foxbusiness.com included these details in its rundown of the situation.

Darden Restaurants

Darden Restaurants (DRI 29.90), operator of the Olive Garden and Red Lobster chains, reported fiscal third quarter earnings well above expectations and issued a full year outlook that tops the current consensus estimate. Darden reported earnings of $0.80 per share in its fiscal third quarter, excluding nonrecurring items. The results were $0.12 better than the First Call consensus of $0.68.

Darden said combined same-restaurant sales were down 3.2% in the quarter. Olive Garden performed the best, with a same-restaurant sales decline of 1.4%. Looking ahead, the Orlando, Fla.-based company issued upside guidance for the full year, expecting earnings per share from $2.66 to $2.74, well ahead of the $2.52 consensus. Revenues are expected to range from $7.09 billion to $7.13 billion, shy of the $7.23 billion consensus.

The chain that is behind such brands as Olive Garden and Red Lobster sees 2009 ESP results coming in 15-20 cents higher than analysts have been anticipating. Management expects sales growth of between 9 percent and 9.5 percent for the year, despite forecasting same-store sales to drop to between 1.25 percent and 1.75 percent. The euphoria in today’s rise may also be tied in to options expiration and some traders getting caught leaning the wrong way.