American International Group Inc., which has received $180 billion in taxpayer money to stay in business, created 73 millionaires with bonuses of $1 million or more in 2008, New York’s top legal officer said on Tuesday.
New York Attorney General Andrew Cuomo, releasing details of a probe into payments at the insurer, said the top bonus recipient was paid more than $6.4 million, and the top 10 received a total of $42 million.
“These payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG,” Cuomo wrote in a letter to Barney Frank, chairman of the House Committee on Financial Services.
“Thus, last week, 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.
Cuomo offered the details to Frank before a committee hearing in Washington on Wednesday.
AIG did not immediately return a call seeking comment.
Cuomo said in the letter, which he released to the media, that his office had obtained the contracts under which AIG made the payments. It said most bonuses were locked in at 2007 levels “despite obvious signs that 2008 performance would be disastrous.”
Cuomo is investigating whether the bonuses were paid fraudulently under New York law and has asked for the names and amounts and details of contracts.
AIG has argued that its hands were tied contractually over $165 million in bonuses it paid to AIG employees on Sunday.
Eleven employees who received retention bonuses of $1 million or more no longer work for AIG, Cuomo wrote. He said AIG would not disclose the names of people who received retention payments.
“My office will continue to seek an explanation for why each one of these individuals was so crucial to keep aboard that they were paid handsomely despite the unit’s disastrous performance,” the letter said.
On Monday, Cuomo said he was going to issue subpoenas to AIG, whose executive pay plans have drawn the wrath of President Barack Obama. A U.S. Treasury official said the government will modify a planned $30 billion capital injection for the company to try to recoup hundreds of millions of dollars in controversial bonuses.
(Additional reporting by Jonathan Stempel; editing by Toni Reinhold and John Wallace)
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