The first salvos were fired late Tuesday when Rep. Henry Waxman, who chairs the House Committee on Oversight and Government Reform, disclosed that he sent letters to the first nine major banks set to receive a capital injection from the government, seeking information on their compensation and bonus plans for 2008 and other years.

New York Attorney General Andrew Cuomo said that he would also be looking into the issues , though he isn't opening a formal investigation at this time.

Though what's commonly known as the Wall Street bailout package includes modest restrictions on CEO pay, it hardly prevents participating financial firms from paying bonuses to top executives and others.

And in an environment of beaten-down stock prices, rising layoffs, recession and huge government bailouts, experts and legislators say big end-of-year bonuses will cause a firestorm of public outrage and likely provoke a Congressional backlash.

"The corporate community doesn't seem to get it," says a seething Nell Minow, founder of the Corporate Library, which focuses on corporate governance issues. "If the corporate leaders don't come to the American people with some accountability, they are going to find themselves in a world of pain. Congress will set CEO pay."

And then some.

"People are going to be demanding that someone go to jail," say Rep. Peter DeFazio (D.-Ore), who says his constituents have applauded him for voting against the legislation. "It will require Democrats to revisit restrictions [on CEO pay]. "

DeFazio says he would also recommend Congress "empower a division in the FBI and Justice Department to investigate the fraud and misdeeds that went on."

Bailout Bonanza

Big compensation packages for CEOs, especially those on Wall Street, have been a matter of controversy for years, but what's different this time around is that the financial crisis has bludgeoned investors and taxpayers alike just as the economy tips into a nasty recession.

"You’re really dealing with an environment where outrage is the benchmark," Eric Dezenhall, founder of Dezenhall Resources, a damage control expert who's represented CEOs facing criminal prosecution and corporate crises. "In a climate like this, the question is: Do you want to make your millions or to be loved? Take your pick. Its not all spinnable."