• This is a rush transcript from "Your World With Neil Cavuto," February 4, 2010. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: You might have heard once or twice there are some at the White House who dismiss us, that they don’t even listen to us.

    Then there are those who are honest and rise above the petty fray to talk to us, and yet only us. I’m not talking the gardener. I’m talking the czar, the pay czar, who could have gone on any cable channel to talk business, but chose instead to talk to me on Fox Business.

    And let’s just say, for those of you who get Fox Business, the pay czar did not disappoint, especially when taking on critics who say bankers still pulling down fat pay packages are pulling a fast one on him.

    (BEGIN VIDEOTAPE)

    CAVUTO: They rolled you.

    Do you think they rolled you?

    KENNETH FEINBERG, SPECIAL MASTER FOR EXECUTIVE COMPENSATION: Well, absolutely not. First of all, understand, these contracts that are being honored occurred years ago, before the TARP law was even implemented, not on our watch. These are valid, binding contracts. And what I’m trying to do — frankly, with the help of AIG — is get as much of that money back as we can and also make sure that the $45 million that this unit orally pledged to pay back the taxpayer is paid back.

    CAVUTO: Well, how much of that...

    FEINBERG: We’re up to $39 million

    CAVUTO: How — it is $39 million?

    FEINBERG: Thirty-nine million of the $49 million that was orally pledged last year has been repaid under this agreement.

    CAVUTO: So there are disputes on that, sir, that it isn’t $39 million, that you’re overstating it.

    What – you’re — it is, sir?

    FEINBERG: $45 million was the total that was pledged.

    CAVUTO: Right.

    FEINBERG: Nineteen million was delivered about six months ago. Another $20 million is delivered as a result of this negotiation. There’s about $7 million to go. It will be collected.

    CAVUTO: I know you talk about this idea that these were contracts written years ago and you didn’t want to break up, you know, contracts and all that. It’s — legally you can’t. It’s tough. And you’re a pretty good lawyer.

    But, I mean, the firm wouldn’t even be in the position to make good on these contracts had taxpayers not intervened in the first place, right?

    So — so doesn’t that, in a sense, be it at taxpayer default, make all these contracts null and void?

    FEINBERG: Now you’re a lawyer. AIG’s lawyers tell me it’s valid. The employees tell me it’s valid. The Federal Reserve tells me it’s valid. The Office of Financial Stability tells me it’s valid.

    CAVUTO: Does the president tell you it’s valid?

    FEINBERG: I don’t speak to the president about this...

    CAVUTO: Really?

    FEINBERG: ... this case.

    CAVUTO: This never came up in your conversations?

    FEINBERG: Never, ever...

    CAVUTO: When was the last time that you...

    FEINBERG: ... have I talked to the White House.

    CAVUTO: When was the last time you talked to them?

    FEINBERG: I’ve never spoken to the president about this.

    CAVUTO: Really?

    FEINBERG: Never. Not anybody at the White House...

    CAVUTO: OK.

    FEINBERG: Anybody at the White House. So — so if these contracts – I’m trying to deal here with a problem to maximize the amount of money that can come back to the taxpayer. And far from being outmaneuvered, I would say that with all due respect to Senator Grassley, who I have great respect for, we are trying here to maximize getting these getting these dollars back, not paying out AIG financial products people.

    CAVUTO: But did you look at not rewarding this or finding a way around rewarding this, because this money is going back to the very folks, as you know, sir, who got the company in the debacle it eventually landed in?

    FEINBERG: Under the law that I am administering, I will do what I can in 2010 compensation, where I do have jurisdiction, to try and make sure that these retention payments are taken into account when I set prospective pay in 2010. But I’m not prepared to challenge valid contracts entered into years ago.

    CAVUTO: So, Mr. Feinberg, people look at this and say, well, if this is a preview of coming — I don’t know, salary or contract arbitration attractions, the other side has you.

    FEINBERG: People — I mean, look, I’m angry about this. The fact of the matter is — this is the end of the retention contract problem. These contracts were entered into in 2007...

    CAVUTO: Right.