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AIG Under Investigation

Published 10/16/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

The New York Attorney General’s office is launching an investigation into the business practices of recently bailed out insurance giant American International Group.

New York Attorney General Andrew Cuomo said that the investigation will determine if AIG was in violation of the law for the excessive compensation doled out to its executives as the company was teetering on the brink of bankruptcy. The investigation will also examine the legality of the company’s recent highly publicized executive retreats. If AIG is found to have broken the law, the state will seek reimbursement, according to Cuomo.

"The party is over," Cuomo said at a news conference on Wall Street. "No more hunting trips. No more luxury resorts. They are not going to have the party and leave the hangover for the taxpayers."

During a Congressional hearing last week it was revealed that in March, then CEO Martin Sullivan was awarded a $5 million bonus and another $15 million as a golden parachute just as the company was realizing the magnitude of their problems. It was also revealed that the company was warned as early as fall 2007 that it was taking on too much toxic debt and that bankruptcy could be a real possibility.

In addition, those hearings also revealed that company executives were treated with a $440,000 Calif. Retreat, complete with manicures, pedicures and golf outings just days after accepting $85 billion in taxpayer money to avoid failure.

Source The Washington Post:

American International Group, the insurance giant U.S. taxpayers recently rescued from bankruptcy, is under scrutiny by New York investigators for possibly breaking the law by giving hefty executive bonuses while company leaders knew AIG was in danger of going broke.

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