New York A.G. Andrew Cuomo: “A.I.G. made more than 73 millionaires”
In an article by Louise Story of the New York Times, N.Y. Attorney General Andrew Cuomo says that seventy three people at AIG received at least $1,000,000 in bonuses. “A.I.G. 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 said in a letter to Representative Barney Frank.
Read Andrew Cuomo’s entire letter to Barney Frank here.
One of my first questions is, where is the U.S. Attorney General’s office on this one? I’m not suggesting Cuomo is overstepping his boundaries nor that Holder is negligent in his duties, but where does the top U.S. Attorney fit in on this?
The President said he is looking for Treasury Secretary Timothy Geithner to use “every single legal avenue” to get taxpayers money back from A.I.G. executives. Shouldn’t “every single legal avenue” involve the A.G.?
Anyway, here’s a portion of Cuomo’s letter to Frank:
AIG now claims that it had no choice but to pay these sums because of the unalterable terms of the plan. However, had the federal government not bailed out AIG with billions in taxpayer funds, the firm likely would have gone bankrupt, and surely no payments would have been made out of the plan. My Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money. I hope the Committee will take up this issue at its hearing tomorrow.
Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $ 1 for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG’s assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim.
AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary’s business. However, to date, AIG has been unwilling to disclose the names of those who received these retention payments making it impossible to test their claim. Moreover, as detailed below, numerous individuals who received large “retention” bonuses are no longer at the firm. Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments.
The outcry is too great, the spotlight is too bright. This is not going to end well for the 73 millionaires or the other 400 or so people who received these “retention bonuses” from A.I.G. They should have been good with their “retention jobs” after the bailout.
What are they being retained for anyway? For running A.I.G. into the ground? I’d like to see where they plan to go and get similar jobs in this market.