GOP Demands Probe into AIG Campaign Donation

New York's Republican party said the Democrat-controlled state government is stonewalling attempts to investigate a $100,000 donation to the Democratic party from American International Group days before state officials initiated the bailout of AIG.
    
State Republican Chairman Joseph Mondello accuses Democrats of a duck-and-cover response to the 2008 donation first reported Thursday by The Associated Press.
    
AIG and the state Democratic Committee say Gov. David Paterson and his insurance superintendent knew nothing of the Aug. 29 donation by AIG before initiating marathon sessions in the first week in September to save AIG.
    
Republican Assemblyman Greg Ball of Putnam County says his formal request for an investigation to the chamber's corporations committee has gone unanswered since Thursday.
    
“It looks increasingly like there was pay to play methods used here,'' Ball said Saturday. “We as New Yorkers need a full investigation. If this wasn't the case, we need to know. If it was the case, we need to act.''
    
Corporations Committee Chairman Richard Brodsky, a Westchester Democrat, hasn't responded to requests for comment.
    
Paterson, as governor head of the party, says he also knew nothing of the donation. He says his interest was saving jobs in a major New York company.
    
“Several public calls have been issued for a thorough investigation into the matter, yet the all-Democrat state government continues to stonewall and refuses a thorough and independent investigation,'' Mondello said. “The appearance of this type of gross impropriety demands a thorough investigation, particularly now, as Democrats in Albany and Washington D.C. are reaching into the wallets of taxpayers to fund massive bailouts and executive pensions while average families struggle to survive.''
    
Paterson spokesman Marissa Shorenstein said Saturday that there would be no comment beyond last week's statement that the governor knew nothing of the donation until it was reported by the AP. She wouldn't comment on calls for investigation.
    
Party spokesman Carly Lindauer also refused further comment on Saturday, sticking to last week's response that Paterson didn't know of the donation that was used for the national convention.
    
Democrats control the executive branch and both legislative houses as well as all statewide offices.
    
Campaign finance records show AIG donated $100,000 on Aug. 29 to the Democrats, by far its largest donation to the party since at least 1999. Insurance Superintendent Eric Dinallo said he started negotiating with AIG and federal officials days later, but the governor hadn't yet been informed. On Sept. 16, Paterson in a televised news conference announced the “great news'' that New York officials helped the giant insurer strike a historic loan deal with the Federal Reserve to keep AIG afloat.
    
That led to an $85 billion bailout of the company by the federal government. Now Washington lawmakers are blasting AIG for paying more than $160 million in bonuses to employees of a division primarily responsible for AIG's meltdown.
    
A national consumer advocate called it a “classic example'' of how insurance companies buy clout in states and in Washington.