The failed insurance giant AIG is preparing to pay out $450 million in bonuses to top executives and other employees despite receiving a $173 billion government bailout. The bonuses include over $165 million to executives in the Financial Products unit, which lost $40 billion last year and played a major role in the meltdown of the global financial system. AIG is paying out the bonuses even though it is now 80 percent owned by the US government. On Sunday, Lawrence Summers, the director of the White House National Economic Council, described the bonuses as outrageous, but he said the bonuses are part of a contract.

Lawrence Summers: “We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.”

AIG’s new chief executive Edward Liddy justified the bonuses, saying AIG would have trouble attracting and retaining talent “if employees believe their compensation is subject to continued and arbitrary adjustment by the US Treasury.”

Meanwhile, AIG has disclosed for the first time the names of the financial institutions that benefited from the government’s $173 billion bailout. Goldman Sachs was the largest recipient at nearly $13 billion. Over $35 billion was also paid out to foreign banks including Société Générale of France, Deutsche Bank of Germany, Barclays of Britain and UBS of Switzerland.

In El Salvador, leftist presidential candidate Mauricio Funes has claimed victory, ending twenty years of conservative rule. Funes’s party, the FMLN, is a former guerrilla group that fought El Salvador’s US-backed military government for close to twenty years. Funes defeated Rodrigo Avila of the ARENA party by three percentage points. During a victory speech, Funes promised “safe change” in the mold of Brazil’s president, Luiz Inácio Lula da Silva.

Mauricio Funes: “That is why I invite, from this moment, different social and political forces to help us build this unity, which should be based on tolerance, on respecting differences and the identification of common objectives.”

In an attempt to defuse a growing political crisis, the Pakistani government has announced the reinstatement of Iftikhar Chaudhry, the deposed chief justice. The move comes as Pakistan was facing mass streets protests against the rule of President Asif Ali Zardari, the widower of Benazir Bhutto. On Friday, Zardari ordered Pakistan’s main opposition leader, former Prime Minister Nawaz Sharif, to be placed under house arrest. Sharif defied the order and held a large protest in Lahore on Sunday. Sharif was threatening to march to Islamabad, but the protest was called off after the government announced the reinstatement of Chaudhry. Chaudhry and sixty other judges were dismissed in 2007 by former president General Pervez Musharraf.

An American activist from Oakland, California was critically injured Friday when Israeli soldiers fired a tear gas canister directly at his head during a weekly nonviolent protest against the wall in the West Bank village of N’alin. Thirty-seven-year-old Tristan Anderson is the fourth member of the International Solidarity Movement to be critically injured or killed by the Israeli military since 2003.

Jonathan Pollak of the ISM: “He was shot at directly with a tear gas projectile, with an extended range tear gas projectile from about fifty to sixty meters. And the impact caused several condensed fractures to his skull and collapsation of his eye socket. He was operated on in the hospital a few hours later in critical condition, and large portions of his frontal lobe had to be removed, because it was splattered with bone fragments as a result of the impact of the tear gas canister.”

During their weekly demonstrations since last April, four unarmed N’alin residents have been killed and over 400 injured by the Israeli Defense Forces.

The International Committee of the Red Cross concluded in a secret report two years ago that the Bush administration’s treatment of prisoners “constituted torture” in violation of the Geneva Conventions. The findings were based on interviews with prisoners once held in the CIA’s secret black sites. The Red Cross said the fourteen prisoners held in the CIA prisons gave remarkably uniform accounts of abuse that included beatings, sleep deprivation, extreme temperatures and, in some cases, waterboarding. The author Mark Danner published parts of the secret Red Cross report in the New York Review of Books. Danner said the Red Cross’s use of the word “torture” has important legal implications. Danner said, “It could not be more important that the ICRC explicitly uses the words 'torture' and 'cruel and degrading.' The ICRC is the guardian of the Geneva Conventions, and when it uses those words, they have the force of law.”

Hours after excerpts of the Red Cross report were published, former Vice President Dick Cheney appeared on CNN. He was asked whether he believed President Obama was making Americans less safe by abandoning some of the Bush administration’s counterterrorism techniques.

Dick Cheney: “I do. I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11. I think that’s a great success story. It was done legally. It was done in accordance with our constitutional practices and principles. President Obama campaigned against it all across the country. And now he’s making some choices that, in my mind, will in fact raise the risk to the American people of another attack.”

Dick Cheney’s comments came days after the Obama administration said it will no longer consider prisoners at Guantanamo Bay to be enemy combatants. Despite abandoning the label, the administration claims it still has the right to hold prisoners indefinitely without charge even if the individual is captured far from any battlefield and has not directly participated in hostilities.

Attorneys for Bernard Madoff have filed an appeal to challenge a judge’s decision to keep the former chairman of NASDAQ in jail until his sentencing in June. On Thursday, Madoff pleaded guilty to running the biggest Ponzi scheme in history, defrauding investors of $64 billion. He faces up to 150 years in prison. Meanwhile, newly released court documents show Madoff and his wife had a net worth of over $800 million at the end of last year. Their assets included homes in Manhattan, Palm Beach and the French Riviera, a $7 million yacht, a $2 million fishing boat and $2.6 million in jewelry. Madoff’s wife is trying to keep nearly $70 million worth of assets, including a penthouse Manhattan apartment, claiming her money has nothing to do with her husband’s scheme.

In other economic news, Chinese Premier Wen Jiabao has publicly expressed concern about the security of China’s trillion-dollar investment in US government debt. Wen said, “We have lent a huge amount of money to the US. Of course we are concerned about the safety of our assets.” China is America’s biggest foreign creditor.

On Saturday, a European delegation met with Hamas leader Khaled Meshaal in Damascus in the first announced visit of a European delegation to meet with Hamas leaders. Members of the delegation included British Parliamentarian Clare Short.

Clare Short: “We’re very clear that to make progress we need to talk to Hamas, because they represent a big proportion of the Palestinian people. So we’re trying, by our visit, to bring more and more parliamentarians to open up discussion with Hamas in order to move things forward in the hope that we can, in the end, get a just peace.”

Two Israeli police officers were shot dead on Sunday near the settlement of Masu’a in the northern West Bank. An organization calling itself the “Imad Mughniyeh Group” claimed responsibility for the attack.

In Afghanistan, the Taliban has claimed responsibility for setting a roadside bomb that killed four US soldiers on Sunday. Meanwhile, the mayor of Kandahar survived an assassination attempt Sunday when a remote-controlled bomb was place on a wheelbarrow near his office. The bombing killed one person and injured six others.

The US has carried out another missile strike inside Pakistan. A US Predator drone fired two hellfire missiles at a home near the Afghan border. The strike reportedly killed four militants.

Former California Congresswoman Hilda Solis has been sworn in as Labor Secretary. In her first day in office, Solis announced the suspension of Bush administration rules that made it easier for companies to hire immigrants as so-called guest workers. Solis said today’s economic climate makes educating workers more important.

Hilda Solis: “In times of economic crisis, giving Americans the tools they need to find and keep good jobs must be our priority. Now, more than ever, we must help workers by prioritizing job training and assistance. Retooling our workforce not only helps workers but supports high growth industries by ensuring they have the adequate skills that workers need.”

New Mexico has moved a step closer to abolishing the death penalty. On Friday, the state senate voted 24-to-18 to end capital punishment, but it is unclear if Democratic Governor Bill Richardson will sign the repeal bill.

In Vermont, hearings begin today on whether the state should legalize same-sex marriage.

In Tennessee, fourteen anti-coal activists were arrested Saturday as they participated in a die-in in front of the Tennessee Valley Authority’s headquarters in Knoxville. Organizers said the action was held to show solidarity with communities affected by the destructive impacts of mountaintop removal coal mining and the survivors of the recent coal ash disaster outside of Knoxville.

And in Arizona, the state’s oldest newspaper, the Tucson Citizen, has announced its final issue will be on Saturday. The paper is owned by the Gannet chain. Meanwhile, members of the San Francisco Chronicle’s largest union have agreed to contract concessions that parent company Hearst Corporation says are essential to keeping the newspaper open.