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To: geode00 who wrote (191063)	3/16/2009 6:07:48 PM
From: stockman_scott	Read Replies (2) \| Respond to of 306849

New York’s Cuomo Says He Will Subpoena AIG for Data (Update1) By Karen Freifeld and Hugh Son March 16 (Bloomberg) -- New York Attorney General Andrew Cuomo said he will subpoena American International Group Inc., the insurer that got a $173 billion taxpayer bailout, for information on employees who he said were sent bonuses March 13. Cuomo said in a conference call that the New York-based insurer claims it had to make the retention payments because of employment contracts. “If the taxpayer didn’t bail out AIG, those contracts wouldn’t be worth the paper they’re printed on,” Cuomo said. “Just because there’s a contract doesn’t mean there’s no way around the contract.” The attorney general demanded the names the employees, their positions, job descriptions and information on their performance, as well as their employment contracts and who negotiated them, according to a letter Cuomo sent AIG earlier today. Cuomo said in the letter that he would subpoena the company if he didn’t receive the information by 4 p.m. today. “We are in contact with the attorney general and, of course, will respond to his request,” Christina Pretto, an AIG spokeswoman, said in a phone interview earlier today. AIG, saved from collapse by the taxpayer bailout, has come under criticism for awarding $165 million in retention pay to employees in the unit that sold credit-default swaps, transactions that helped trigger the global credit crisis. President Barack Obama today called the AIG bonus payments an “outrage’‘ and said he wants Treasury Secretary Timothy Geithner to pursue blocking the payments or recouping the money. Concept ‘Oxymoronic’ “The whole concept of a performance bonus to me is oxymoronic when it comes to AIG,” Cuomo said. “These are people especially in the financial products’ division that virtually” bankrupted the company, “that’s why the taxpayer had to come in,” he said. Cuomo said in his letter to AIG Chief Executive Officer Edward Liddy that he would probe whether anyone receiving the payments was involved in the conduct that led to AIG’s demise and bailout, whether the employees are “truly required’‘ to unwind AIG Financial Product’s positions, as he says AIG claims, and whether such contracts are unenforceable for fraud or other reasons or would break New York law. Cuomo, who has been investigating compensation arrangements at AIG since last fall, said the insurer earlier agreed to make no payments out of its $600 million financial products’ deferred-compensation pool. Binding Contracts AIG has said it was distributing the retention pay and bonuses because of legally binding contracts. Obama said he asked Geithner to use the leverage of the government rescue money to “pursue every single legal avenue to block these bonuses and make the American taxpayers whole.” “This is a corporation that finds itself in financial distress due to recklessness and greed,” Obama said. “It’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” the president said at a White House event. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” AIG planned to award about 4,600 of its managers and employees a total of about $1 billion in bonuses, Bloomberg News reported in January, citing two people familiar with the situation. In addition to $450 million for financial products’ employees, AIG was to give about $470 million for three other subsidiaries and $148 million to top executives, according to the people and company filings. 2009 Earmarks Of the $450 million, the $165 million in retention pay was for 2008 and due to be paid by March 15, $55 million was paid in December and another $230 million was originally earmarked for 2009 retention payments for financial products’ employees. Liddy has said he wants to reduce the 2009 payments by at least 30 percent. Cuomo has been in a court battle for the past month with Bank of America Corp. over the names of Merrill Lynch & Co. employees who received $3.6 billion in bonuses in December. Cuomo sought the names of individual bonus recipients for his probe of the payments, which were granted before the company was acquired by Bank of America on Jan. 1. Merrill posted a $15.8 billion loss in the fourth quarter. Bank of America has said it would turn over the names if Cuomo agreed to keep them confidential. Cuomo claims he has discretion over whether the data should be public. A New York judge said March 13 he would rule within a week on whether the data should be confidential. To contact the reporters on this story: Karen Freifeld in New York State Supreme Court at kfreifeld@bloomberg.net; Hugh Son in New York at hson1@bloomberg.net. Last Updated: March 16, 2009 17:10 EDT