AIG paid bonuses of $1 million or more to each of 73 employees, including 11 who no longer work for the company, said New York Attorney General Andrew Cuomo. He subpoenaed information from AIG yesterday saying he wanted to determine whether the payments constitute fraud under state law. In a letter to Barney Frank of the House Committee on Financial Services, Cuomo asked the panel to take up the issue at a hearing scheduled for tomorrow.
AIG contracts written last March guaranteed employees 100 percent of their 2007 bonus amounts for 2008, "despite obvious signs that 2008 performance would be disastrous in comparison to the year before," Cuomo said. The company and some federal regulators have said it was obligated by contract to make the payments. Cuomo said the bonuses might have been fraudulent if AIG officials knew the company couldn't afford them.