How could they know about the contracts that were signed after the new year?

Back in October, Cuomo, the New York Attorney General, got AIG chairman Ed Liddy to agree not to pay any money from the $600m compensation pool designated for the controversial Financial Products division.

Lawyers working for both AIG and the Treasury spent hours poring over the contracts between the company and employees with the FP arm to see if it could renege on its 2008 bonuses.

The eventual advice - given the contracts stated that 2008 bonuses had to be equal to the value of 2007 bonuses, which related to a much stronger financial performance and had already been paid - was no, and so the bonuses were paid, last Friday.

In other words, any of those involved in the situation between October and now - Cuomo, Paulson, Geithner, Bernanke - could revealed what was about to happen in an attempt to stop the payments from being made. None did.

And so now all Congressional leaders like Richard Shelby have left is a lot of hot air and the hope of taxing the bonuses so extremely that whoever received them - and we may never know unless Cuomo gets his way - will end up with very little indeed.

As an aside, it should be noted that the original version of the Senate's fiscal stimulus bill contained legislation - championed by Senator's Olympia Snowe and Ron Wyden - that would have clawed-back all bonuses over $100,000 paid by companies receiving federal funds, or levied a 35pc excise tax on the money.

But in the closed-doors rush to reduce the overall size of the stimulus package, that clause was eradicated. So Congress now has to reinvent the wheel and attempt to apply it historically.