March 21st, 2009
10:22 AM ET
6 years ago

20 states launch AIG investigations

American International Group has received $170 billion in government money since September.
American International Group has received $170 billion in government money since September.

(CNN) - Twenty state attorneys general announced investigations Friday into the $165 million bonuses paid by insurance giant AIG last week, with Connecticut's top lawyer issuing subpoenas to CEO Edward Liddy and 11 other executives.

Connecticut Attorney General Richard Blumenthal and the Democratic chairman of the General Assembly's Banks Committee want Liddy and other executives to appear Thursday and bring with them "original or copies of documents regarding the AIG Financial Products Corp. retention bonus plan and any related contracts or agreements."

"Now living off supersized taxpayer-paid bonuses, these AIG employees have a moral and legal obligation to appear at this legislative hearing and disclose details about corporate compensation to employees as well as investment decisions by AIG Financial Products Corp. involving credit derivatives and dealings that have led to market destruction," said Blumenthal, a Democrat.

AIG officials are citing a Connecticut law to justify their payment of the bonuses. The law says that employees can sue in civil court for payments withheld that are due them and recoup double the amount of money. Many AIG employees live in Connecticut.

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Filed under: AIG
soundoff (41 Responses)
  1. John Starnes Tampa Florida

    A bonus is supposed to be compensation for doing an exemplary job...these people ran AIG into the ground and are now parasitizing the taxpayer in grand style. If you or I do a poor job, we either DON'T get a raise or we get fired. These bonuses are thievery plain and simple....and stealing is a crime...deal with them accordingly.

    March 21, 2009 10:28 am at 10:28 am |
  2. Pete

    I think obama's fake outrage has turned around and bit him on his butt

    March 21, 2009 10:31 am at 10:31 am |
  3. Brian

    Why are we wasting tax payers money on investigating LEGAL bonuses? Its another example of government wasting money to put on a show for re election bids. Obama and Congress rubber stamped the bonuses with approval in the Stimulus Bill.

    Obamas Administration asked to include the language allowing the bonuses because they realized blocking these contractual obligations would bring a lawsuit, so they decided to explicitely allow them in law.

    AIG bonuses (in contracts before the mortgage crisis) are not an outrage. The OUTRAGE is Obama and Congress acting like they had nothing to do with approving them, which is explicitely in the Stimulus Bill congress voted for and Obama signed. The bonuses should be paid from Obama and Congresses salaries.

    March 21, 2009 10:35 am at 10:35 am |
  4. slp

    Brian,

    I totally agree. There sure is alot of feigned innocence and hypocrisy in Washington these days.

    March 21, 2009 10:48 am at 10:48 am |
  5. Ken

    Who are we kidding – very few people know anything about this story. If the special olympics comment were made by anyone other than obama, and by the likes of bush, gingrich, or cheney, the press would have interrupted regular programming to report the breaking news. 8,000 reporters from every media outlet in the country would have generated heaadlines that started with words like "BIGOT," "OUT OF TOUCH," 'INSENSITIVE,' "UNCARING," etc...
    However, because obama said it, nothing is reported and it only shows up on cnn.com as a "ticker" story. what a joke. what hypocrisy. readers – do yourself a favor and find the audio or video of obama speaking those words and ask yourself why the crowd is clapping and cheering. can you say "cult of personality?" we're all in serious trouble

    March 21, 2009 10:52 am at 10:52 am |
  6. Jimmy Boy

    You should be investigating Obama and his team!

    March 21, 2009 10:53 am at 10:53 am |
  7. David

    I believe that most of the money loan came from the Fed. Congress didn't have to vote on this money. The money in question is the 30 billion that was given to them in January that came from the TARP So were did they break the law? Why waste more money on a nun-issue. We have larger fish to fry like getting this country going and as of Nov. 2009 there will be no more bounuses. Case close.

    March 21, 2009 10:57 am at 10:57 am |
  8. what gives?

    so brian and pete!! last week everyone was outrage,how can the government allow this..why are'nt they doing something about it..now they are doing something about it..everyone's outrage..what gives ?

    March 21, 2009 10:58 am at 10:58 am |
  9. independent Jim

    The horse already got out of the gate. What do we really need to learn from the AIG situation? (1) Any regulators responsible for oversite need to be as smart or smarter than those being regulated. (2) If you believe Sen Dodd or the Administration (i.e., that they were fooled about the wording of the bailout legislation), apparently the really smart people we need are already in AIG, and not in the Administration or Congress. Once again, to paraphrase d'Touqueville, Americans deserve the government they vote for.

    March 21, 2009 11:01 am at 11:01 am |
  10. Scott, Tucson

    The courts should hold up what is a legal binding contract for bonuses to the AIG employees, but that 165 million dollars is going to pale in comparison to the cost the taxpayers is shelling out so that Obama can jet-set all over the country on Air Force One every few days.

    March 21, 2009 11:03 am at 11:03 am |
  11. Clark

    We definitely need to move on. No one likes the bonus issue at AIG, but the amount of money involved here is miniscule compared to the grand problem and not worth spending who knows how much time and money on fighting it in the courts (where the legal outcome would probably not be what everyone expects). The government and Congress need to re-focus on the big picture.

    All the publicity and furor has most likely guaranteed that this is the end of contract compensation anyway, as well as the end of hedge funds.

    March 21, 2009 11:08 am at 11:08 am |
  12. DC

    Yeah these folks did such a great job in running AIG, lets give em a bonus. I say let them go, and let them try to find a job in the economy they help create!

    March 21, 2009 11:08 am at 11:08 am |
  13. Lotta muni

    $165 million is a lot of money. I givees they'll form a committee to investigate, which will cost the taxpayers tens of millions of dollars if not more more.

    March 21, 2009 11:11 am at 11:11 am |
  14. slp

    The way I see it, this is more of a moral issue than a legal one. Aren't democrats always saying that you can't legislate morality. Morally, the executives at AIG should not take this money. They know that people all over this country are suffering and that taxpayer money of these very same people funded these bonuses. However, our wonderful leaders in Washington decided to word the bill that provided the bailout money to allow the payment of bonuses to stand. Therefore, the outrage that they have displayed is halarious. If these contracts are not honored, then no contracts from now on will be legally binding. Some of the executives at AIG have listened to their conscience and given the money back. That makes me feel better about them as people. However, I don't see how the government can make them do anything. Tge American people should direct their anger where it belongs. They need to direct their anger toward our esteemed leaders in Washington instead of sending death threats to these executives and their families.

    March 21, 2009 11:13 am at 11:13 am |
  15. neo-con VS. neo-con

    who's putting the bills?

    the already bankrupt workers on main street.

    the neo-cons on wall street are having it both ways.

    robbing the nation and the world,

    while putting on a face of justice.

    well, that was the whole idea

    when they decided to push obama into the WH.

    March 21, 2009 11:14 am at 11:14 am |
  16. vst

    Well done AIG !!

    Another trillion dollar bailout...

    May God have mercy on each one of us.

    March 21, 2009 11:18 am at 11:18 am |
  17. Franky

    This is hilarious...so they are criminals, huh? Criminals for taking our money and not asking, huh? Criminals for running a big corporation which by the way, the people made, not them. They began as a small business and they grew, do you know what you call that? Not small business, big business. So people are upset for trying to save their company, huh? That's right their upset?? Because of AIG and how they do business?? How they did it?? You know, I think criminals are guys in jail or like Madoff...or wait a minute, I get it now. Is only criminal if one of your friends misled you, huh? Is only criminal if Madoff gets caught, huh? But it ain't criminal when one of your friends suggest to you that you should do that or try this insurance?? Look at what you're saying, I'll make you guys look like fools and celebrate like never before...ohh yeah, dynasty baby, dynasty, LOL!!!

    March 21, 2009 11:19 am at 11:19 am |
  18. worriedmom

    I realize that AIG is wrong in these bonuses however I think our anger is being directed at the wrong people. It was our Congress and treasury that we should be mad at. They knew that these bonuses were in place and they thought it would just slid on thru unnoticed. However once people caught on, then Congress shifts the blame to AIG. Now I think AIG is partially to blame but I think our Congress is fully to blame and instead of putting our anger to AIG we need to put it to Congress! Let the tea parties begin!!

    March 21, 2009 11:29 am at 11:29 am |
  19. The lonely Libertarian of Liverpool NY

    Maybe we should be focusing on the bailout plans that have lead to this controversy. The taxpayers should not have been forced by Congress to bail them out because they are too big to fail. AIG would be in bankruptcy and not paying bonuses.

    March 21, 2009 11:30 am at 11:30 am |
  20. Merengo

    The excesses of the business elite revealed lately remind me, at least in part, of the cause(s) of the French and Russian revolutions.

    March 21, 2009 11:30 am at 11:30 am |
  21. John

    Millions in bonuses for the execs of failed companies.

    If there ever was a sense of "entitlement" in America, its most evident not among welfare recipients but in the boardrooms of big companies and on Wall Street.

    March 21, 2009 11:35 am at 11:35 am |
  22. alvino

    The people who will get bit in the butt are the republicans who voted in congress to increase the taxes to 90% on the bonuses of the wealthy at AIG.

    It sure makes the return to the pre Bush rates of 39% small by comparison.

    March 21, 2009 11:50 am at 11:50 am |
  23. Simmy

    worriedmom,

    Actually, this information was news for quite some time. I heard it reported before Bush left office. Before the bailout that almost forced McCain to suspend his campaign/debate, AIG was in the news. Why no one was outraged at that time is perplexing.

    There are underlying themes being played out in the media. They're called "politics and grandstanding." And if you are per chance a Republican, let me be the first to inform you that Republicans are focused on winning elections, and care nothing about AIG, monies lost, unemployment, you name it. Their agenda is to stay in the spotlight, continue using propaganda to sway Independent voters, and rescue their dignity.

    Society is to blame for continuing to support a lifestyle of greed, and condoning the evil cult of criticism. Peace....

    March 21, 2009 11:54 am at 11:54 am |
  24. Majik

    You can't blame Bush anymore.

    March 21, 2009 11:57 am at 11:57 am |
  25. joe smith

    it appears some comments must have hit a nerve in some circles close to the same bunch that has put a hole in the national debt, aka, AIG. too bad your screening people weren't working in the budget office 5 years ago, maybe their expert scrutinizing could have saved us this fiasco..

    March 21, 2009 11:59 am at 11:59 am |
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