NY Attorney General to Probe AIG Bonuses for Fraud

By: By MICHAEL VIRTANEN
By: By MICHAEL VIRTANEN

ALBANY, N.Y. (AP) - New York Attorney General Andrew Cuomo told
American International Group he wanted a list on his desk by the end of the day of employees set to receive millions of dollars in bonuses.

Cuomo said his office will investigate whether the employees were involved in the insurance giant's near-collapse and whether the $165 million in bonus payments are fraudulent under state law. AIG reported this month that it lost $61.7 billion in the fourth quarter of last year, the largest corporate loss in history.

Cuomo said he would issue subpoenas at 4 p.m. if he didn't get the names plus information about their work and contracts.

President Barack Obama noted earlier in the day that the giant insurance company had received "received substantial sums" of
federal aid and said he asked Treasury Secretary Timothy Geithner
"to use that leverage and pursue every legal avenue to block these
bonuses and make the American taxpayers whole."

Representatives of AIG did not immediately respond to requests for comment.

In a letter Monday to AIG chief executive Edward Liddy, Cuomo said he has been investigating AIG compensation arrangements since last fall and he was disturbed to learn during the weekend of its plans to pay millions in bonuses to members of its Financial Products subsidiary.

In addition to the list of people set to receive bonuses, Cuomo demanded details about who developed the bonus plans and a status
report on whether payments have been made.

"Covering up the details of these payments breeds further cynicism and distrust in our already shaken financial system," Cuomo wrote.

The $165 million was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue.


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