WASHINGTON (Reuters) – President Barack Obama sought to claw back bonuses paid to employees of insurer AIG yesterday, expressing outrage that taxpayer money was used to reward executives at the bailed-out firm.

Though the insurance giant is being kept alive on a government bailout of up to $180 billion, it is now paying out $165 million in bonuses.

“This is a corporation that finds itself in financial distress due to recklessness and greed,” Obama said.

“Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” he said at the White House.

“How do they justify this outrage to the taxpayers who are keeping the company afloat?”

Obama said he had ordered Treasury Secretary Timothy Geithner to pursue “every single legal avenue” to cancel the bonuses and a Treasury official said later it would modify a planned $30 billion capital infusion for American International Group to try to recoup the bonuses.

White House spokesman Robert Gibbs said the Treasury could impose rules on the $30 billion loan facility for AIG but declined to go into specifics or spell out ways the legal avenues available to the administration to block the payments.