From NYTimes.com: The Case for Paying Out Bonuses at A.I.G.

As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts.

If government officials were to break the contracts, they would be "breaking a bond," Ms. Meyer says. "They are raising a whole new question about the trust and commitment organizations have to their employees." (The auto industry unions are facing a similar issue -- but the big difference is that there is a negotiation; no one is unilaterally tearing up contracts.)

These employees would have caused the bankruptcy of A.I.G. which would have broken all their contracts.  The only reason A.I.G. is not bankrupt is because of the enormous sum of taxpayer money that has been used to prop A.I.G. up.  So, what do we get out of it?  Business as usual

We have to save them to save ourselves.  How many times will we have to hear this?  In the mean time, the employees that caused this may walk away with millions.

Perhaps a controlled bankruptcy backed by the U.S. government wouldn't have been so bad.