Gives Connecticut’s Blumenthal Data on Bonuses

American International Group Inc., whose compensation policies before and after its U.S. bailout are being investigated, turned over information on its executive bonuses to Connecticut’s attorney general, who said the insurer paid out $218 million.


That amount is more than the $165 million in bonuses previously disclosed by the New York-based company. The insurer provided a list of bonus amounts and contract terms to Richard Blumenthal, who said the information supports his view that the basis for paying the bonuses is “completely unjustified,” according to a statement he issued yesterday.


“These contracts rip the rug from under AIG’s excuses -- revealing no basis under Connecticut law for these mega taxpayer-funded bonuses,” Blumenthal said. “AIG’s own documents reveal that it turned an emergency bailout into a meritless handout, paying windfalls to employees as reward for financial failure.”


Blumenthal said he asked AIG’s lawyers to explain the difference in total bonus amounts.


“We don’t know why the numbers are different,” Blumenthal said today in an interview. “That’s what we are asking the company to explain.”


The documents Connecticut received showed that 418 people received bonuses, from $1,000 to $6.4 million, he said. At least 73 people made $1 million or more, and there were seven people who made $4 million or more, Blumenthal said.

Activities at the AIG Financial Products unit in Wilton, Connecticut, will be the topic of a March 26 hearing in Hartford before the state’s Banks Committee, according to a statement from lawmakers.


“They put their stamp of approval on bad securities products and sold them like gold,” Democratic state Representative Ryan Barry, co-chairman of the General Assembly’s Banks Committee, said in the statement. “We want to examine the pay structure and fee incentives that led to this quick-sale, high-risk culture and see what regulatory gaps exist that can be tightened.”


In addition to Liddy, subpoenas will be served on 11 other AIG executives who are believed to have received bonuses, Connecticut officials said, including Douglas Poling. Poling, an executive vice president, got a $6.4 million bonus, said a person familiar with the bonuses.


Cuomo has said AIG paid retention bonuses of $1 million or more to 73 people of the money-losing unit, including 11 who no longer work at the firm. Alex Detrick, a spokesman for Cuomo, didn’t immediately return a call today about the higher total bonus amount reported by Blumenthal.


“Taxpayers feel misled and manipulated,” Blumenthal said yesterday in his statement. “We must fight, with every legal remedy available, to recapture every cent of these scarce taxpayer resources. AIG relied on contracts and Connecticut law as a flimsy and fatally flawed legal camouflage to reprehensibly enrich employees.”

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