NY Attorney General To AIG: You Have Until 4:00 PM To Give Us The Names

Andrew Cuomo has written a letter to AIG in which he explains that they will turn over the names of those employees from the Financial Products subsidiary (that’s the division that brought down the company) who are receiving bonuses by 4:00 pm today or they are coming at them with subpoenas. Yes, ladies and gentlemen, it’s another awesome Andrew Cuomo letter after the jump.

March 16, 2009

Edward M. Liddy, Chairman & CEO American International Group, Inc.
70 Pine Street New York, NY, 10270

Re: AIG Compensation Investigation

Dear Mr. Liddy:

The Office of the New York Attorney General has been investigating compensation arrangements at AIG since last Fall. We were disturbed to learn over the weekend of AIG’s plans to pay millions of dollars to members of the Financial Products subsidiary through its Financial Products Retention Plan. Financial Products was, of course, the division of AIG that led to its meltdown and the huge infusion of taxpayer funds to save the firm. Previously, AIG had agreed at our request to make no payments out of its $600 million Financial Products deferred compensation pool.

We have requested the list of individuals who are to receive payments under this retention plan, as well as their positions at the firm, and it is surprising that you have yet to provide this information. Covering up the details of these payments breeds further cynicism and distrust in our already shaken financial system.

In addition, we also now request a description of each individual’s job description and performance at AIG Financial Products. Please also provide whatever contracts you now claim obligate you to make these payments. Moreover, you should immediately provide us with a list of who negotiated these contracts and who developed this retention plan so we can begin to investigate the circumstances surrounding these questionable bonus arrangements. Finally, we demand an immediate status report as to whether the payments under the retention plan have been made.
We need this information immediately in order to investigate and determine:

(l) whether any of the individuals receiving such payments were involved in the conduct that led to AIG’s demise and subsequent bailout;
(2) whether, as you claim, such individuals are truly required to unwind AIG Financial Product’s positions;
(3) whether such contracts may be unenforceable for fraud or other reasons; and
(4) whether any of the retention payments may be considered fraudulent conveyances under New York law.

Taxpayers of this country are now supporting AIG, and they deserve at the very least to know how their money is being spent. And we owe it to the taxpayers to take every possible action to stop unwarranted bonus payments to those who caused the AIG meltdown in the first place.

If you do not provide this information by 4:00 p.m. today, we will issue subpoenas and seek, if necessary, to enforce compliance in court.

Andrew M. Cuomo
Attorney General of the State of New York
cc: AIG Board of Directors

Re: AIG Compensation Investigation (PDF) [Office of the Attorney General of New York]

Comments

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  1. Yankees368 says:

    :-)

    Burn these people at the stake

  2. oneliketadow says:

    A night in Riker’s and these clowns will talk.

  3. Sheila Cook says:

    Andrew Cuomo is superman in my book.

    Why is no one from Congress doing anything about this?

    Surely, us lowly taxpayers and the Attorney General of one state can’t be the only ones who are pissed off about these bonuses.

    • dlynch says:

      @Sheila Cook: cuomo = hero.

    • NICU says:

      @Sheila Cook: Cuomo is an idiot blowhard. I’m against bailing out AIG, but being this invasive is an over the top. Its great PR for his re-election campaign and luckily all New Yorkers are paying for this circus act.

      Cuomo has a terrible history of not knowing his boundaries and going over the top, lets not forget him forcing ISPs to ban all Usenet access over 88 offending groups out of 100,000 – [yro.slashdot.org]

      • cabjf says:

        @NICU: Re-election? I’m pretty sure he has higher offices on his mind. Kind of like his predecessor (hopefully a little less scandal though).

      • madog says:

        @NICU: I don’t think it’s invasive at all due to the fact that AIG simply would not have been able to give out these bonuses in the first place without the governments money.

        It’s kind of like when you give money to a homeless person hoping that they’ll use it to buy food but instead they used it to go buy booze and drugs.

        Although that’s a very simple analogy in the sense that the money was loaned out to AIG and it was billions of dollars.

        • stennieville says:

          @madog: You can’t go have that homeless guy arrested because he bought booze with the money you handed him, though. Once you give it to him, it’s his. I suppose you could turn him in for buying drugs, though, if you have evidence that’s what he did.

          If Cuomo has a legitimate investigation against AIG’s Financial Products division, and specifically their compensation, he probably has the right to make the demand. If not, he’s overstepping at worst and grandstanding at best.

          I still prefer this approach to Geithner shrugging his shoulders and going “Yeah, it sucks, but what I can I do?”

      • Papa Midnight says:

        @NICU: I’m inclined to agree about the latter part. I don’t live in New York, but I was not happy about that little power play.

    • Eyebrows McGee (now with double the baby!) says:

      @Sheila Cook: I think he’ll have to do some fancy legal footwork to get this information released, that’s why. But I admire him for trying, anyway, even though there’s a lot of grandstanding.

  4. Bladefist says:

    The government demanding a company to turn over who they plan to give bonuses too. Wow, this is very scary.

    The fact AIG took tax payer funds is irrelevant in my opinion. It shouldn’t have been offered.

    Another power grab by the government.

    • chris_l says:

      @Bladefist:

      When the government becomes a major stakeholder (and in my opinion, should be a majority stakeholder), they have the right to investigate how the company is run. I’d say the same thing if someone owned 40% of Apple stock and Apple told the owner to blow it out their ass when they asked about Jobs’ health.

    • howie_in_az says:

      @Bladefist: The fact that AIG took (I would’ve used the word required) taxpayer funds to continue operating is very much relevant.

      It’s a little scary, but at the same time people on welfare shouldn’t be going out buying new Mercedes Benzes without someone somewhere going “hang on a minute…”

    • SynMonger says:

      @Bladefist: I believe it is (finally) one of our elected representatives standing up for us. Why weren’t any strings attached to this money when it was offered? Where is the accountability?

      That AIG took tax payer money is very relevant. Tax paying citizens are now part owner in this company, and we should be exercising some say in where it goes.

      In my mind, bonus money would be paid based on job performance. Let’s face it, the performance at AIG was dismal at best, so these bonuses shouldn’t be paid at all, with tax payer money or otherwise.

    • wee0x1B says:

      @Bladefist: The government *owns* AIG. We own it, you and me. We paid for it, you see. I personally would like to seen them burn in the closest approximation of hell we could come up with, but that’s not the case now.

      But now that we have essentially nationalized the company, there’s nothing at all wrong with needing to have a say in how it’s run.

    • HIV 2 Elway says:

      @Bladefist: It’s scary any times the terms of a loan are changed after the fact. The outrage needs to be directed towards our incompetent legislators who lent money without stipulations on how it can be used. Releasing the recipients’ names does nothing but fuel uneducated bloodlust.

    • Paladin_11 says:

      @Bladefist: The only thing of issue here is the timing. The government is going to get this information eventually anyway, through the tax records.

      Barney Frank pointed out this morning that the taxpayer owns AIG. In light of this the company can go forward with the bonuses but the employees should decide whether they want to accept them and get fired or decline them and keep their jobs. No way should a company in the dire straights of AIG pay bonuses to the very people who got them into this mess.

      As for doing further business with AIG, there’s no business to be done. The government is cleaning up its balance sheet with the intent of parting out the company to the highest bidders. In the meantime I think it’s safe to say that they have a vested interest in not allowing AIG to squander their capital on bonuses to under-performers.

    • From the cubicle of PGibbons says:

      @Bladefist: Well hell, the “government” owns over 80% of AIG now!

      Call me a commie, socialist evildoer, but it seems to me that the majority owner (aka “big guberment”) of this company has every right to ask them what they are doing with our money, to “maximize shareholder value.”

      Say what you want about Cuomo’s political intentions, but he’s acting in the People’s interest by holding these crooks’ feet to the fire, and that’s fine with me. Better than IGNORING the AIG crimes for political gain (contributions, etc.), as other politicians have been happy to do for years now…

    • Papa Midnight says:

      @Bladefist: Power Grab? The Government owns 80% of the stock in the company. A company which more than gladly accepted the funds allocated, for what was not the first time.

      Actually, scratch that: YOU (granted that you are a tax paying American – No insult of any form meant, just a statement) partly own 80% of the majority share in the Company. A company whose stock value went up over 60% today, by the way to a whopping $0.68 cents!

      As for whether or not this should not have been offered in the first place… I’m not sure how to answer that.

      Actually, if a single party has that much control over the shares of the company, technically, that party OWNS the company. Therefore, WE OWN AIG.

    • battra92 says:

      @Bladefist: I agree with you but but the cult of the Messiah and the One World Government will just disagree.

      The government should have no say in ANY private company.

      • Optimistic Prime says:

        @battra92: The problem is once they took that much government money, they stopped being a private company. It’s not like were talking a small grant as seed money here, we bailed them out of a ridiculously large hole.

  5. hypnotik_jello says:

    In addition, we also now request a description of each individual’s job description and performance at AIG Financial Products. Please also provide whatever contracts you now claim obligate you to make these payments. Moreover, you should immediately provide us with a list of who negotiated these contracts and who developed this retention plan so we can begin to investigate the circumstances surrounding these questionable bonus arrangements. Finally, we demand an immediate status report as to whether the payments under the retention plan have been made.

    This is good stuff… you know, have them actually show the contracts

  6. Airjoe says:

    I wish they would’ve put Cuomo in for Clinton’s seat instead of Gillibrand. Either way, he’s still kicking ass where he is, so good on him!

  7. Cameron Loranger says:

    Bout time we have a politician down in the muck trying to clean up the place. Sure, there are probably many others working the issue as well, whether in their favor or the public’s, but this guy has some grit in him. It’s almost surprising to discover his kind survives: those with spines.

  8. Saboth says:

    Err wouldn’t they have to provide this information to the IRS anyhow within a year or so?

    These are people that have undermined the security and welfare of all of America and the entire world due to their greed. So no, I don’t think it is “scary” that the government is stepping in.

    You know what would be scary? If taxpayers that lost 50-60% of their retirement funds and/or jobs stormed these buildings and dragged these people out by their hair and had an “inquisition” of their own.

  9. ncpeters says:

    What authority or reasoning does the state of New York have to be going after AIG? I agree that AIG should be investigated but it seems that it should be the federal government doing this.

    • SynMonger says:

      @ncpeters: They do business in the state of New York, so it gives them very real authority.

    • Eyebrows McGee (now with double the baby!) says:

      @ncpeters: I think it’s likely the state has better footing to go after AIG than the feds do, at least on issues like this. But I’m not sure Cuomo has too many legs to stand on either way. :)

  10. wardawg says:

    Hurrah for attempted accountability! If AIG turns over this information it still does not stop them from paying out the bonuses. Sure we can seek compensation after the fact, but like any respectable ponzi scheme, the money is already gone.

  11. deejaypopnfresh says:

    go bladefist!
    2 unconstitutional acts dont make a right

  12. waffles says:

    Then the federal government can come down and tell the NY DA who does have the authority then get those people to do it.

  13. prag says:

    This is a little heavy handed. Are they going to bust down doors and demand people return bonuses? AIG should have declined to pay retention bonuses however. If this resulted in “non-retention” I’m sure there are a pile of out-of-work Merrill and LB people who would be happy to replace them bonus or no bonus.

  14. Swifty says:

    If it turns out the government isn’t able to get AIG to rescind the bonuses, then they should just drop the matter.

    But the next time they come asking – and considering even with the bailout funds, they still posted a loss, I’m betting there will be a next time – I honestly hope the government laughs at them.

    @Bladefist – It’s taxpayer money – public funds. So the government has every right to ask AIG how and where they spent it. So the fact they received the bailout money is not irrelevant.

    • SynMonger says:

      @Swifty: While it isn’t irrelevant that AIG took the money, the money was given to them with very few strings attached. There was no thought given to any system of accountability as to what these funds were going to be used for.

      We handed them huge amounts of cash, and didn’t ask what they were going to do with it. It was our lawmakers in Washington who fell down on this one.

      Congress made a big stink about giving the bailouts to begin with, but once the decision was made, nobody stopped long enough to setup a system to make sure it got used for things other than bonus payouts, covering debts to foreign investors, and “business trips” for the execs.

      Woops!

      • jimconsumer says:

        @SynMonger: Further, it is my understanding that these bonus payments took place BEFORE AIG took the federal money. It’s an important distinction. Cujo ( ;) ) is demanding information about what they did with their own damn money, and I don’t think he has a leg to stand on.

  15. HungryMohican says:

    @ncpeters: AIG is headquartered in the State of New York and is, therefore, subject to NY laws and must respond to the request from Mr. Cuomo.

  16. Hank Morrow says:

    I am just glad that someone is following up and looking into this…

  17. sprocket79 says:

    I love how he signs it off, “Very truly yours.” It’s over-polite tone makes the evil grin behind it so much more evil.

    • sir_eccles says:

      @sprocket79: It is my experience that the more polite and nice sounding legal writing gets, the heavier someone is about to be stomped.

      Look for key phrases such as “with all due respect” (trans: makes the whatever sign), “the learned gentleman” (trans: did you get your degree online?).

  18. sven.kirk says:

    Very cool…
    BUT what rights does the state have in this, with this being a FEDERAL issue.
    New York has alot to lose if they try to go through with this (attorney fees).

    Don’t take it the wrong way. I want them to be held accountable. But the government responsible (federal) has to do the asking, not the state.

    If I take a loan out at my bank, me and my bank are responsible for that transaction. Not me and some other bank.

    • SynMonger says:

      @sven.kirk: States have every right to police the business that is conducted within it’s borders.

      You (and businesses) are responsible for following all laws, local, state, AND federal.

      Anyone who has paid taxes has a dog in this fight.

      • sven.kirk says:

        @SynMonger:So you have no problem with your local/county/state running EVERY aspect of your life?

        AGAIN!!!
        I do not disagree with the fact that they need to be audited (and asap). What I have a problem with is where/who is demanding the auditing.

        It is called ‘jurisdiction’. Any judge failing to see that, and still sign the subpoena, will be virtually signing their resignation.

    • idip says:

      @sven.kirk: Didn’t the treasury of New York also extend a loan to AIG?

      I think that means that New York has the right to investigate, they are directly involved with AIG.

    • Eyebrows McGee (now with double the baby!) says:

      @sven.kirk: Corporate law and contracts are typically governed by state law. Many (most?) corporate and contract issues begin in state court, though they may end up in federal court in the end.

      The feds don’t have all that much “original jurisdiction” where things go RIGHT to federal law enforcement or federal courts.

      There are two issues at hand here — 1) Congress (which is NOT a law enforcement or judicial body) holding AIG accountable for the bailout money that Congress gave them, on the grounds that it’s Congress’s (taxpayers’) money. And 2) Law enforcement, including AGs and prosecutors, holding AIG accountable for contracts and conduct, which is typically a state issue.

      If you (AIG) take a loan out from your bank (Congress), then, yes, the loan is between you and Congress. UNLESS you took the loan out fraudulently. Now there’s an issue between you and your bank (the loan itself) AND an issue between you and local law enforcement (the fraud). Cuomo is attempting to do part II of this scenario. Does that help?

      • sven.kirk says:

        @Eyebrows McGee (on Twitter: LPetelle): Yes it does. Right now, I so wish I was back in high school / college right now so I would actually have the time to discuss this stuff further, and not worry about working.

        My MAIN worry is that IF the state has no jurisdiction, what will happen then? Somebody is gonna look real stupid, and have a big lawyers fee to go along with it.

        As you can see, I love being the devils advocate.

  19. B1663R says:

    when did they get this letter?

    because that is a helluva lot of info to acquire within a half hour.

    oh well, 4 minutes to go, PITTER-PATTER!!!

  20. Anonymous says:

    @bladefist:

    I agree the money shouldn’t have been offered first; but they did not have to take it either. They chose to, now they should answer to all of us. No one forced them to take the money, it just comes with strings attached.

    It’s not the gov asking AIG what they do with people’s money: it’s me, it’s most people, it’s all of us.
    If AIG is going to cost me money, I want to know where it goes; if it’s totally private and has nothing to do with me, I’m fine with them keeping their business private.

  21. burgershot=burgerbuddy says:

    Ding-dong AIG…Gentlemen, start your lawsuits!

  22. T Axel Jones says:

    So I guess Cuomo’s gonna be running for higher office soon, yes?

  23. Yoko Broke Up The Beatles says:

    Maybe I’m just experiencing some midwest awe of the fabulour New Yawkers (I say with love & respect), but I really like Cuomo! Stick it to ‘em!

  24. Brawndo_The_Thirst_Mutliator says:

    Actually to all those stating that if you own 40% of a stock you should have control over the company…that’s actually not true, unless the 40% is the largest share held by any of the stock holders. IE if someone had the other 60% then they have the controlling interest in the company, and you and your 40% do not have a controlling interest, which means you do not have as many votes as the 60% guy. Obviously I’m not saying the Govt does or doesn’t have a controlling interest at this point in AIG. I just think that its important to understand the difference between a controlling interest of a company and just being a share holder.

    On another note, whats with the reply button?

  25. Anonymous says:

    for all of you cheering on our incredibly bold government – why wasn’t there some accountability built into the TARP money BEFORE it was handed out and check out the following from opensecret.org:

    Before the Fall, AIG Payouts Went to Washington
    Published by Massie Ritsch on March 16, 2009 11:16 AM | Permalink | Comments (0)

    As long as everyone’s talking today about AIG’s payouts to its executives and foreign banks, let’s remember the payouts AIG has made over the years to politicians. In the last 20 years American International Group (AIG) has contributed more than $9 million to federal candidates and parties through PAC and individual contributions. That’s enough to rank AIG on OpenSecrets.org’s Heavy Hitters list, which profiles the top 100 contributors of all time.

    Over time, AIG hasn’t shown an especially partisan streak, splitting evenly the $9.3 million it has contributed since 1989. In the last election cycle, though, 68 percent of contributions associated with the company went to Democrats. Two senators who chair committees charged with overseeing AIG and the insurance industry, Sen. Chris Dodd (D-Conn.) and Sen. Max Baucus (D-Mont.), are among the top recipients of AIG contributions. Baucus chairs the Senate Finance Committee and has collected more money from AIG in his congressional career than from any other company–$91,000. And with more than $280,000, AIG has been the fourth largest contributor to Dodd, who chairs the Senate’s banking committee. President Obama and his rival in last year’s election, Sen. John McCain (R-Ariz.), are also high on the list of top recipients.

    AIG has been a personal investment for lawmakers, too. Twenty-eight current members of Congress reported owning stock in AIG last year, worth between $2.5 million and $3.3 million. Sen. John Kerry (D-Mass.), one of the richest members of Congress, was by far the biggest investor in AIG, with stock valued around $2 million.

    Last year AIG and its subsidiaries spent about $9.7 million on federal lobbying, or about $53,000 for every day Congress was in session in 2008. The company’s spending on advocacy last year was down from an all-time high of $11.4 million spent on lobbying in 2007.

  26. krispykrink says:

    Names? How about giving them 24 hours to pay back every single penny that was given to them. If they fail to do so, every single AIG employee, from the CEO all the way down to the janitor gets tossed into a Supermax prison for 10 years.

  27. Preyfar says:

    I believe in Harvey Dent… err, Andrew Cuomo.

  28. HiPwr says:

    Let’s punish AIG by never giving them another bail-out again.

  29. Lisa Nickel Nelson says:

    Finally perhaps someone will put a halt to these ass clowns.

  30. savdavid says:

    I hope he does run for office. He does his job.

  31. Allen Harkleroad says:

    Kudos to Cuomo, I wish the State of Georgia’s Attorney General had the same balls as Cuomo….

  32. Trai_Dep says:

    But won’t somebody stand up for the riverboat casino operators/AIG execs? Won’t somebody demand they receive hundreds of millions of taxpayer dollars for running the global economy into the ground? Anonymously? ANYbody?!
    Oh, wait. Yankees368, Bladefist and Taney71 have stepped up to the plate.
    Phew!

    • From the cubicle of PGibbons says:

      @Trai_Dep: SOMEONE had to step out on a limb and speak up for the poor defenseless insurance racket personnel. I feel so bad I’m writing my congresscritter now and telling them to toss in a few extra billion for me the next time AIG’s lobbyists come a’calling.

  33. BytheSea says:

    Who would comply with this? Certainly not the testosterone storm Roman senators who run banks.

  34. IamNotToddDavis says:

    So Cuomo and the Feds will force AIG to take back bonuses that AIG was contractually obligated to pay to employees that met bonus criteria, and then when these employees leave because they aren’t getting paid what they were told they would get paid, the “too big to fail” AIG will most certainly fail, if not cease operating altogether, and the market distortion will make our current issues seem petty by comparison.

    BRILLIANT!

    • From the cubicle of PGibbons says:

      @IamNotToddDavis: Yeah, THAT’LL happen. These gamblers met criteria of selling useless paper that Big Government has to now insure, and the contractors and contractees get everything they conspired for? How about we just force AIG into bankruptcy, get our money out, and cut up those gambling employee contracts instead? These guys and the bankers are lucky they aren’t in pound-me-in-the-ass Federal Prison already. The balls of sucking out our taxpayer funds as a reward for the damage they have done!

  35. zero_o says:

    Let us not besmirch riverboat casino operators, The riverboat casinos know the margins and they are all in their favor.

    • From the cubicle of PGibbons says:

      @zero_o: You would think not (considering how and what they did), but then again they themselves seem to continue to be rewarded quite nicely anyway.

      I guess at that Riverboat Casino, the roulette wheels the bankers and their friends play are all one color, and the house is you and me, no limit bets.

  36. loki95662 says:

    IamNotToddDavis,
    Hey genius, they’re talking specifically about bonuses paid to the division that was responsible for this entire mess. Reading comprehension not you’re strongest suite I take it? Let em leave… Who would have them?

  37. jcazz says:

    Look, I think that letter is full of awesome, but how does the NYAG have the legal ability do this?

    Yeah, yeah, I get that it’s “our” money, but could the AG make such a demand of say Joe’s Transmissions?

    At the end of the day it’s a great letter, but I bet it lacks any real legal teeth. It’ll play great to the populous though, and the court of public opinion can certainly make or break a national political career.

  38. akhil1980 says:

    @IamNotToddDavis

    What bonus criteria could they have possibly met ??
    “Show up to work” .. maybe. Other than that I don’t see any “performance” which merits a bonus. The AG is only asking to see how these contracts were designed & who was responsible for that.

    We’re not asking them to forego their salaries, which must be pretty hefty by themselves. Just the out-of-place performance bonuses.

  39. starrion says:

    Cuomo: I am altering the deal. Pray I don’t alter it any further…

    AIG is owned by the taxpayers. The US Government didn’t march up Wall St and seize the company by force. AIG went to the Government and told them “Give us cash now or the Worldwide economy gets it”. We are now unwilling shareholders in this financially and ethically bankrupt company. If there is an ironclad legal agreement that says IF John Smith sells X and generates Y profits then he gets (B)onus then he has to get it.

    What we can’t do is have outrage cause AIG to void it’s contractual agreements, because then no one will do business with it. Then we (the taxpayers) will own shares of a dead company, instead of one that might be worth something in a few years.

    • SergioDingo says:

      @starrion:

      Don’t you think it’s a bit late to worry about who will and will not do business with AIG at this point? The answer is nobody, regardless of contract modifications.

      What we should be concentrating on is hunting down these financial terrorists, seizing their assets, and putting every single penny of wealthy they own into cleaning up the mess they made.

      These people need to be brought up on charges of treason.

      We put people to death in this country for murder.

      What’s worse? 1 count of first degree murder? Or the wholesale slaughter of the world economy. We don’t have our priorities straight.

  40. Sean Larsen says:

    You have to put on the shoes of the employee here for a moment – how would you like it if the bonus # that you are contracted to receive was just taken without you being able to do anything about it? You would be pretty damn upset and bemoaning the fact.

    If there are contracts in place – unless there is something that was done to void them they have to get paid. We can not just ignore the law because we don’t happen to not agree with it on this occasion. The shoe will be on the other foot at some point down the road

    • floraposte says:

      @Sean Larsen: Individual upset isn’t really relevant here. We’ve got an economy wherein workers are being asked to take considerable salary cuts that weren’t in their contract, and they don’t like that either, and I won’t like it if it happens to me, as it might. But that’s the way it goes.

    • From the cubicle of PGibbons says:

      @Sean Larsen: AIG should be bankrupt, in which case I wonder if all these “bonuses” would still be immediately paid out at 100% to these crooks?

  41. Firesoul1 says:

    government should never have to rely on a single company to sustain and entire industry. To be honest, i’d rather have AIG go under than GM, even if GM sucks too.

  42. Anonymous says:

    This is nuts! No matter what is demanded it STILL won’t change anything. We are low life tax payers and these are the BIG boys and they almost always win. It is simply the way it is and the way it has always been and it is not going to change. Wake up and bend over – AIG is laughing all the way to the bank.

  43. IamNotToddDavis says:

    @akhil1980 – You can read what they were contractually obligated to pay here.

    [www.foxbusiness.com]

    AIG’s lawyers have told them that if they don’t pay the bonuses that they can get sued and lose more than just the bonuses, thus causing all the bailout money to be for naught. This is just phone populism that won’t fix anything and only makes people look self-righteous about.

  44. OrlandoDude says:

    @Bladesfist:

    Amen. The gub’ment rushed in bail out AIG “RIGHT NOW WE CAN’T WAIT DAMMIT” without even bothering to look into what previous commitments/contracts it was obligated to. Now we have these “discoveries” of previously-promised bonuses.

    It’s like buying a house sight unseen and complaining you gotta pay the realtor 6% AFTER YOU BUY IT.

  45. Ben Miner says:

    If there were no requirements as to how AIG was going to spend this bailout money (and I’m not saying there were not, I am just aware of any, at least in terms of bonus payments) then what right does the government have to demand their financial records?

  46. valor77 says:

    Haha,

    This is the same Andrew Cuomo who ran HUD (Housing and Urban Development) under the Clinton administration! This is the man that demanded that Freddie Mac and Fannie Mae buy an increasingly ridiculous percentage of risky sub-prime mortgages and securities (50%)! In case anyone has forgotten, the mortgage bubble and the house of cards built on bad mortgages caused the financial difficulty we are now in. AIG didn’t worry about valuing its Alt-A and sub-prime mortgage-backed securities at a higher level because of the implicit backing of the federal government through Freddie and Fannie – the two government-sponsored companies forced to buy these bad securities by Andrew Cuomo in the 1990’s!

    What AIG is doing is NOT ILLEGAL, yet we have an attorney general making up his own rules on the fly. AIG accepted the Federal Reserve’s deal, which made no mention of controlling bonuses that were previously contracted to employees. Folks need to stop this populist, stake and pitchfork, “burn it all down” mentality and look at the facts and the bigger picture. AIG agreed to suspend payments of dividends to shareholders in their agreement, but never to suspend previously promised bonuses to employees. This is a very slippery slope we are on.

    Come on Consumerist – do some freaking research before cheerleading a hypocritical politician..

    • bloatboy says:

      @valor77: Agreed. That Andrew Cuomo is being touted as some kind of hero when his prior actions, borne out of a sense of making people feel better, are the primary cause of both the housing bubble and the subprime crisis.

      This current demand he is making, also intended to make people feel better, may or may not be legal. The AG of New York is not allowed to make up the law to make his constituents feel better. I haven’t bothered to check, since the notion that a central player to this catastrophe has not only never been called to account, but is pointing an accusatory finger at a firm that is likely the victim (in some way) of his prior malfeasance.
      I haven’t actually checked on the legality of this, or what effect his actions as head of HUD had on AIG because I am just incensed at this scumbag’s hypocrisy, pompousness, perversity, and mostly, at the fact that almost everyone is accepting his piety at face value.

      I second Valor77’s call for people to pay some attention before cheering on this pile of crap.

  47. Anonymous says:

    This is a request for information to further an ongoing investigation. I’m not a lawyer, but it sounds like the investigation is still exploratory. In fact, this letter is not a subpoena but more of a courtesy call; “do it, or else I’ll tell the judge”.

    This letter seems more like grandstanding than anything else. If there were weight behind the accusations, why wouldn’t you shoot first (with a subpoena) and ask questions later (hearing) than vice versa?

    If it were the state of NY vs. me, I’m sure I wouldn’t receive a letter first, and a subpoena second.

    Seems like news spin.

  48. Bahnburner says:

    Hey sheeple….IT’S A DIVERSION!!!!!!!

  49. metaled says:

    Are these still with AIG? That’s one question he should ask! If they were paid “Retention bonuses” and then left the company or retired, wouldn’t that be fraud in itself? He needs to ask their current employment status to see if the retention bonuses worked (not that I think they should have got them, but any of these bonuses are enough money for me to retire on!!!!)

  50. CityGuySailing says:

    Personally, I believe that we, the US Taxpayers who own AIG, are hosed in a major way. If the company had folded, of course, bonus $$’s would not have been paid, and they employees would know that. Of course, the worldwide economy would have folded as well, and everyone who knows WTF they are talking about knows that little tidbit as well. It would have been much worse had AIG folded. Now, that being the case, those employment contracts are STILL valid, and according to NY State Law are enforceable. Additionally, damages may be claimed, and in all likelihood, the employee plaintiffs would prevail. That really wouldn’t matter anyway, because they would then leave the AIG, and then the company would fail ANYWAY. Furthermore, an insurance company will only have clients for as long as people trust them, and this would be a major blow. Think it through…

  51. Imaginary says:

    UHOH! Are we finally getting tired of these greedy s.o.b’s? Are we finally ready to do something about it? Accountability. Responsibility. For and from everyone no matter what their station in life. If I have to answer for my mistakes then so do they. Bigger mistakes mean a longer fall. I think while they’re in court getting drilled we should stand outside chanting “DRILL BABY DRILL!” :p

  52. ugadawg says:

    I’ll bring the torches. Who’s bringing the hounds on this mad chase?

  53. ElizabethD says:

    To those who want us to sympathize with the AIG employees who were expecting/promised bonuses and now might not get them: They should be grateful they still have jobs. I’m serious. Many, many Americans have lost jobs this past year through no fault of their own, despite glowing performance reviews — simply because of this suckass economy. Those of us who still have jobs are doing without raises (never mind bonuses) for the foreseeable future, and/or accepting decreased hours or unpaid days off so that our employers can continue to meet their bottom lines and keep us on payroll.

    Suck it up, AIG peeps! And yes, I’m talking to all levels of AIG staff, not just the hogs at the top. You can kiss all of our rings for helping you continue to receive a paycheck of any size.

  54. econobiker says:

    “list of who negotiated these contracts and who developed this retention plan”

    Just exactly who was the Pointy Haired Boss who let these contracts be approved? (with recs to Scott and his Dilbert cartoon strip.)

  55. MrDo says:

    publicity stunt ++ under what legal grounds does AIG have to comply with this? Zero.

    Funny, if Bush had demanded something like this, you leftist harpies would be crying “CIVIL RIGHTS VOILATIONS!”

  56. MrDo says:

    oh and by the way, most of those bonuses are going overseas and have already been paid out. good luck getting that money back.

  57. azzie says:

    You can’t just “get” subpoena because you want to.

    To get subpoena, which is a court order, you need an active case or investigation. For investigation, you need a statue of law being broken.

    In this case, AIG technically did not break any law other than (possibly) the contract they signed with US government when they got the bailout money. Even in this case it’s federal jurisdiction and has nothing to do with NYS AG.

    Threatening AIG with subpoena gives the etter a nice touch. But I don’t think AG will get it any time soon.

  58. arglebargle says:

    This is entirely the Federal Governments fault.

    They gave the money to AIG unconditionally, and now they don’t like where it was spent.

    Tough Luck, they should have specified conditions BEFORE they gave the money.

    If AIG wanted to spend 2 Billion dollars on Hello Kitty backpacks for all of its employees, they could.

    Congress did not do its job when handing out the money.

  59. jumpo64 says:

    Thank god. I don’t even care if this guy is trying to push a political agenda, at least he’s actually TRYING to do something about these companies. Send them to hell in a hand basket as far as I’m concerned.

  60. usa_gatekeeper says:

    According to CNBC, “..many of the employees who received bonuses are not American and may not care that American taxpayers are outraged over the incident…” i.e., they’re based outside the USA. Gee – I’ll bet they don’t even pay American income taxes on these AIG bonuses.

  61. krunk4ever says:

    Go Andrew Cuomo!

  62. h0mi says:

    “The fact AIG took tax payer funds is irrelevant in my opinion. It shouldn’t have been offered.”

    Wake me up when they go after colleges who give bonuses to presidents, deans and the like after raising tuitions to 30-40k a year.

  63. Corporate-Shill says:

    Nice posturing.

    I want to see the list of names cross referenced with addresses, telephone numbers and email addresses.

    Lets make life rough for those stupid enough to accept the bonus.

  64. doireallyneedausername says:

    I know I am going to get sooooooo badly flamed for this: I think these CEOs DO deserve the bonuses.

    If there were no bonuses, who in their right minds would want to either take the job of CEO or stay in their CEO role, especially at this point in time. Executive bonuses are there to provide additional compensation so highly-qualified executives have enough incentive to stay on-board with the company. Without it, you’d have a ship with no one at the helm.

    Things like parties and corporate jets (which have been perceived as extravagance) are, in fact, a necessity for executives.

    For example, the party that Wells Fargo canceled in Vegas was to compensate the highest producing mortgage brokers in the company. Without these VIP mortgage brokers, you’d have a bankrupt Wells Fargo. No revenue. No profits. You have to motivate your employees somehow. In addition, the money used towards the cost of the party was already locked in and deposited more than one year prior.

    Ditto with corporate jets. An executive’s time is valuable. With a corporate jet, Ford’s CEO can jet to multiple factories for a visit, all in one day. Good luck trying to get to even one factory using a commercial airline. It’s really a question of how valuable is the CEO’s time, and in most companies, the answer is that cost is not an issue as long as the company can make the CEO more productive.

    There are two sides to every story. Unfortunately, we’ve been condition to hate these CEOs. But ask yourself this, is your hatred towards the CEOs truly founded on a solid bed of evidence and researched facts. Or is your hatred based on your friends & family’s (and even the media’s) hearsay about what these executives might be doing wrong?

    Ok, you can now flame away.

    • howtragic says:

      @doireallyneedausername:

      I don’t have a problem with bonuses either. It’s just that, keep in mind, a BONUS, is just that – a reward for a job well done. These executives have done an absolutely PISS POOR job. They completely fucked over millions of people, and have run the company so far into the ground that it would not stay afloat were it not for government help.

      So my question to you is this: when do employees not deserve a “bonus?” Do they have to completely bankrupt the company? Does the company just have to lose billions of dollars a quarter? Or is it when the feds have to give them billions of dollars just to keep them afloat?

      Nothing I know about this company is based in hearsay – it’s all FACT. The FACT is that these executives have NO FUCKING CLUE how to run a successful business. Got that? Otherwise, you see, oh geez, how do I word this so that everyone will understand? God, this is so complicated! Oh, I know. Otherwise, the business would not have gone completely bankrupt! (and yes, that’s what happened – they’re only in business now because the fed bailed them out)

      You see, when you have truly “top talent” running a place, they don’t ruin it.

      Imagine that.

    • SonicPhoenix says:

      @doireallyneedausername: There’s a flip side to that coin. Maybe if the bonuses didn’t incentivize massive short term profit at the expense of long term viability we would have people running the show who actually have the best interests of the company at heart so that they can continue to collect a paycheck. Maybe if we _only_ paid them $1 million per year with no bonuses and no golden parachute you’d get people who were interested in keeping the company alive for twenty years instead of someone who sacrifices the next 19 years of profit so they can get $10 million in bonuses then retire with a $10 million retirement package when the whole thing blows up in their faces.

      Now which would you choose? $20 million in twenty years or $20 million in one year and retire 19 years early or better yet move to another company and do it again?

      There is no incentive to stay with the company with the current executive pay scheme – just look at Bob Nardelli if you need a shining example of exactly what kind of behavior the incentives create.

  65. Beth Coccaro says:

    Gotta love Cuomo’s style…Go get ‘em Andrew!

  66. razremytuxbuddy says:

    Every board member of every publicly held company should read and memorize that letter. That is how much they should be demanding to know about the companies of which they are fiduciaries. It’s high time someone showed them how to do it, and if it was Cuomo who had to step up, so be it.

    Boards of Directors are too often treated as some sort of ceremonial body, and they shouldn’t allow themselves to be treated as such. Their negligence and willful ignorance about what is really happening within the organizations enables the companies to run amok, ultimately running themselves into the ground. This time they have taken our economy down with them.

  67. tc4b says:

    If you ever become the largest shareholder in a particular company, I imagine you’d want to know a thing or two about how they’re doing business.

  68. howtragic says:

    To the people who are claiming that AIG is “contractually obligated” to pay these bonuses, I have one simple question for you:

    Do you honestly believe that AIG, when it’s pricey lawyers were drafting the employment contracts, put a clause in there that said “you, as an employee are guaranteed your bonus no matter what. In the event that you do a terrible job, or the company goes under, you will still receive your bonus.”

    I mean, come on now people, can we all just at least TRY and use a little brainpower when it comes to this story? Is it really that difficult?

    • ZekeSulastin says:

      @howtragic: … because certainly someone like a high-ranking executive earning these bonuses would not have their own pricey lawyer work through the contract deals.

      Can you TRY to use a little brainpower when it comes to posting? Is it really that difficult?

      • howtragic says:

        @ZekeSulastin:

        Of course both sides negotiated the contract, but seriously, Zeke, you cannot HONESTLY believe that a company as big as AIG forfeit their power to have at least some discretion when it comes to bonuses. Really? You cannot possibly be that naive, right?

        And, before you lambast me again – I am a lawyer. I’ve read over PLENTY of contracts. And never have I seen a party as sophisticated as AIG do something that stupid.

        And…..OF COURSE the execs are going to fight it if they don’t get their bonuses. OF COURSE. But, please do not think for a second that because they filed a lawsuit they are in the right.

  69. FrankReality says:

    Andrew Cuomo – a grandstanding headline skank.

    I don’t like what AIG did, but Cuomo cannot go on a fishing expedition just because a company did something legal that he didn’t agree with. He has to have some legal grounds.

    If I were AIG, I’d go to court to block the request since compensation contracts are private personal information and also are confidential information which would cause competitive disadvantage if made public.

    About the only thing the Feds can do with AIG is to not extend any more funds. Second, since the Feds now own a vast majority of AIG stock, they could demand the firing of the CEO and other directors – but they probably wouldn’t do that as they need to
    keep the company viable.

  70. IamNotToddDavis says:

    @howtragic:

    Apparently the pricey lawyers have already spoken, and the answer is- they are either getting paid or we’re going bankrupt.

    And if I remember correctly, the whole point of giving them, what -$40 billion is it?- was to keep them from going bankrupt. I’m not sure I have a problem with them going bankrupt at this point, but let’s be clear about it.

    If Sheriff Cuomo goes after these bonuses and then, what, exactly? AIG goes under, and we as taxpayers lose $40 billion, which then will cause all the nasty stuff they were afraid of last year. We won’t see a penny of that money. I’m not sure I see the upside here.

    • howtragic says:

      @IamNotToddDavis:

      I never said fighting a lawsuit would not cost money. I’ve seen it first hand. Naturally people who do not get what they think they deserve are going to fight it.

      My only point is this: the American public should not be so fucking stupid to believe that AIG employment contracts are ironclad in favor of the employee’s bonus IN ALL CIRCUMSTANCES. That’s just downright ridiculous.

      BTW, as a taxpayer, I would rather spend double on legal fees and deny these “talented” execs their bonuses. I think at this point, we’re down to the nitty gritty – we need to prove our point.

  71. snowburnt says:

    TAKE THE MONEY BACK!!

  72. IamNotToddDavis says:

    Correction from above: we’ve given AIG approximately $173 billion.

    Money well spent, eh?

  73. frodolives35 says:

    Where is our scape goat?? If this were China we would have shoot at least 5 top execs so we could feel better about it and things could continue as usual. The problem is the whole corp exec compensation package is broken. Large corps will be our downfall not our saviors. This is not new do a little digging in history and see what we are repeating. Start with Andrew Jackson and the bank of the United States.

  74. oneemsguy says:

    Families today are struggling with their home mortgages. All of these families suffer greatly from the inability to borrow if they miss or delay payments. Policy makers from both parties step aside to avoid the issue. Why? It may be because of the inability to relate to the ordinary American truly in financial trouble. The impotent comment; “we cannot reward bad decisions by homeowners”. “I have a hard time feeling sorry for the homeowner who borrowed more than he could ever hope to pay.” Americans are pissed! It is also an amazing side step in logic by politicians since we’ve recently tried to bail out Bear Stearns, Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE), and AIG (NYSE: AIG), and Citibank. Now they are paying hundreds of millions in bonuses with the homeowner’s tax dollars in spite of their enormously bad financial management. While foreclosed homeowners sit and wait for better times, the government will send more bail-out money to big bank and automakers and AIG executives so they can keep their homes and good credit standing. There appears to be a marked bias in their favor for preferential treatment. There is a movement to remove the credit score rating system from the lending equation for secured loans, crack down on verifying collateral to protect banks, and this will get lending going again for Americans who need it!

  75. RStui says:

    This guy rocks. I’m moving to New York and voting for him.

    I know some of it (ok, most of it) is posturing, and I don’t necessarily believe AIG WON’T end up handing out the bonuses, but I love that they have to deal with this guy.

    I hope they all have Cuomo-related stress heart-attacks!!

  76. Big Poppa Pimp says:

    @valor77: I wonder how Cuomo’s cheerleaders would feel if the state and federal government extended their “you took taxpayer money so we own you mentality” to all recipients of federal or state aid (anybody here have federally subsidized student loans or grants? tax credits? tax rebates? medicare recipients?). This is somewhat scary. I’m sure many of the same people were against the Patriot Act because they were worried about their “civil liberties.” This is the same man who has much blood on his hands for the housing crisis as was explained above by others… far from a hero and NOT rockin’.

  77. Anthony Rinaldi says:

    If we didn’t give these morons our tax money in the first place they would have gone bankrupt. That would have cancelled all outstanding contractual obligations including bonus money. But we had to be good socialists and use the situation for a government power grab. Started with Bush and increased by Obama. Meet the new boss, same as the old boss.

  78. adamczar says:

    If you’re getting paid by taxpayer dollars, isn’t your compensation and salary made public for transparency reasons?

    I work at a public University and everyone’s salary is published yearly. I’m told it’s because we accept public funds.

    Same deal for AIG.

  79. Rebecca Brown says:

    Dear god, what a mess we’re in. I started to say “they’re in”, and then I realized… we’re all in it.

    The ship’s sinking, and unfortunately, the ship is the freaking economy.

  80. bifloman says:

    How can anyone be shocked that AIG is squandering our money on bonuses? The government gives away our money everyday with no oversight. Now all of a sudden Cuomo and company turn into Captain Renault and are shocked at what’s going on. When Pelosi travels on a scheduled flight and pays for it with her own money, then we will have real change, change even I can believe in.

  81. Anonymous says:

    The reason is AIG is technically an insurance company. There is no federal regulatory body for insurance company so they are subject to the regulations of the state they are in so this does in fact fall under the jurisdiction of the New York State Attorney General

  82. maruawe42 says:

    May the force be with the NEW YORK A.G. I do not like New York but the A.G. has my co-operation. May he prosecute the whole bunch in AiG , if necessary

  83. Anonymous says:

    I like the outcome that this is working for, but that’s not enough for me to support the actions of the supreme policeman. I need to know also what laws he’s asking for this information under, because if he’s just extorting the information with the threat of a frivilous court action then we’re trading corporations running amok for politicians doing the same.

    At some point EVERYONE has to begin playing by the rules, or otherwise this is just going to get dirtier.

  84. Tim Sylvester says:

    This is a list of 22 people that work at AIG Financial Products Corp.

    Joseph Cassano
    President
    +1.203.222.4700
    jcassano@aigfp.com

    William Kolbert
    Chief Information Officer
    +1.203.563.1901
    kolbert@aigfpc.com

    Kathleen Furlong
    Vice President, Chief Financial Officer, and Treasurer
    +1.203.222.4700
    kfurlong@aigfp.com

    David Ackert
    Former Executive Vice President,
    Transaction Development Group
    +1.203.222.4715
    david.ackert@aigfp.com

    Thomas Kushner
    Managing Director of FXPB Derivatives
    +1.203.349.4373
    kushner@aigfpc.com

    James McGinnis
    Managing Director
    +1.203.222.4720
    james.mcginnis@aigfpc.com
    Salvatore Saieva
    Vice President
    +1.815.943.3590
    salvatore.saieva@aigfpc.com

    Ann Reed
    Treasurer
    +1.203.222.4700
    reed@aigfpc.com

    Nick Stephens
    Vice President
    +1.203.563.1928
    nick.stephens@aigfpc.com

    Joe Tom
    Vice President of Information Technology
    +1.203.222.4700
    jtom@aigfpc.com

    Michael Davis
    Vice President
    +1.203.261.6101
    mdavis@aigfpc.com

    Karen Dvorak
    Trader
    +1.203.222.4700
    karen_dvorak@aigtrading.com

    Jurgen Stoop
    Assistant Vice President
    +1.203.861.6170
    jurgen_stoop@aigtrading.com

    Dmitry Santanovsky
    Assistant Vice President Software Development
    +1.203.563.1900
    dsatanovsky@aigfpc.com

    Mitchell Bell
    Assistant Information Technology Director
    +1.203.222.4700
    mitchell.bell@aigfpc.com

    Henry Volquardsen
    Manager, Interest Rates
    +1.203.861.3566
    hvolquardsen@aigtrading.com

    Scott Bihl Manager
    Fixed Income
    +1.203.861.3566
    sbihl@aigtrading.com