The AP is reporting that AIG executives aren’t done partying yet — they took an $86,000 hunting trip even as the company was requesting an additional $37.8 billion loan from the Federal Reserve. Meanwhile, New York attorney general Andrew Cuomo has said that as long as the company continues to be propped up by the taxpayer — he has the power under state business law to review and possibly rescind any inappropriate AIG spending.
In a letter to AIG, Cuomo laid down the law:
In the last several months, as AIG was teetering toward bankruptcy, and operating with unreasonably small capital, AIG nevertheless made numerous extraordinary expenditures in the form of executive compensation payments, junkets, and perks for its executives.
For example, in March 2008, ignoring the massive losses AIG was experiencing, the Board awarded its Chief Executive Officer a cash bonus of over $5 million and a golden parachute worth $15 million. Similarly, in February 2008, a top-ranking executive who was largely responsible for AIG’s collapse was terminated, but still permitted by the Board to keep $34 million in bonuses. This same individual apparently continued to receive $1 million a month from the company until recently.
Moreover, even after the taxpayer-funded bailout of AIG, the company paid hundreds of thousands of dollars for luxurious retreats for its executives, including an overseas hunting party and a golf outing. We believe these expenditures and payments, made in the absence of fair consideration, violated New York law, specifically, N.Y. Debtor & Creditor Law fj 274, which deems such payments to be fraudulent conveyances.
AIG has responded to criticism about the hunting trip with “regret.”
“We regret that this event was not canceled,” said a spokesperson.
AIG has borrowed about $123 billion from the Federal Reserve in the past month.