NY Pols Outraged Over "Staggering" AIG Bonuses

Pressure mounts on AIG executives to give back $165 million in bonuses

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    NEWSLETTERS

    Seventy-three executives of troubled insurance giant American International Group 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, according to New York's Attorney General.

                      Those details added to the drumbeat of anger from lawmakers and the Administration Tuesday over the millions AIG has paid in bonuses when it 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."
                      
    New York Attorney General Andrew Cuomo said that some of the AIG bonuses "were staggering in size" -- the largest was $6.4 million to one person.  Cuomo found that the top seven recipients received more than $4 million each.
               
    "AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout," Cuomo wrote to Congressman Barney Frank, chairman of the House Committee on Financial Services.                              
                  
    AIG's Chairman Edward Liddy is expected to be on the hot seat Wednesday at a Congressional subcommittee hearing on AIG's impact on the global economy before, during and after the federal intervention. The firm, based in Wilton, Connecticut, had said it is bound to pay the bonuses by prior contracts and also by a state law that would allow employees to sue for double what they're owed.
                   
    A second firm, Morgan Stanley, also came under scrutiny for $3 billion in retention bonuses about to be paid to its executives. 

    New Jersey Senator Robert Menendez blasted these payouts in a letter to Treasury Secretary Timothy Geithner urging him to stop the payments, calling them a "misuse of taxpayer money" and an "an insult to hardworking families who are saving every penny and changing their way of life just to get through this financial crisis.