N.J. Launches Probe of AIG Bonuses

N.J. is looking into state law violations

Thursday, Mar 19, 2009  |  Updated 4:37 PM EDT
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N.J. Launches Probe of AIG Bonuses

AP

Liddy's stance that the bonuses should be honored, no matter how distasteful, drew sharp comments from both parties.

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New Jersey officials have joined the chorus of lawmakers launching an investigation into bonuses paid to employees of troubled insurance giant AIG after it took a huge government bailout.

New Jersey Attorney General Anne Milgram said Thursday that the state has begun an investigation into potential state law violations by the American International Group, or AIG.

Milgram sent a letter to Edward M. Liddy, the chairman and chief executive officer of AIG, demanding a list of all individuals in the AIG Financial Products subsidiary who received bonus compensation between September 2008 and the present, the source of the compensation, copies of employment contracts.
  
Seventy-three executives of AIG each received $1 million or more in bonuses meant to keep them at the firm -- but 11 of them have since left, including someone who walked away with $4.6 million, New York Attorney General Andrew Cuomo said this week.
                 
AIG needed $170 billion in taxpayer bailouts just to stay afloat.
                 
Pressure mounted on the AIG executives to give back $165 million in bonuses or else face losing most of it to a new tax law that Congressional Democrats threatened to enact just for them.
                 
"We will take the money back by taxing virtually all of it," said Senator Charles Schumer, (D) New York. "If you don't return it on your own, we will do it for you."
 
Cuomo said that some of the AIG bonuses "were staggering in size."

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