Connecticut Attorney General's Office

Press Release

Attorney General Urges Special Master To Bar $100 Million AIG Bonuses, A Ban On All Bonuses To Employees Of Companies Owing Bailout Funds

February 3, 2010

Attorney General Richard Blumenthal today called on federal authorities to block payment of $100 million in bonuses to AIG employees and bar any company owing bailout funds from paying bonuses until taxpayers are repaid.

State Sen. Bob Duff, D-Norwalk, and State Rep. Ryan Barry, D-Manchester, co-chairs of the General Assembly's Banks Committee, joined Blumenthal's letter to Special Master Kenneth Feinberg, who has jurisdiction over executive compensation at bailed out companies.

"I am writing to urge you to prohibit AIG from paying $100 million in employee bonuses," Blumenthal said. "AIG still reportedly owes federal taxpayers $124 billion -- and should therefore be barred from company from paying a penny of bonus until it repays its massive loan.

"I urge your office and federal authorities to extend the same policy to all companies owing bailout moneys, prohibiting employee bonuses until taxpayers recover their money.

"The AIG retention bonuses are a slap in the face to the hard-working taxpayers who saved AIG through bailout loans and stock purchases. Without taxpayer bailout funds, AIG would have failed or been sold to a third party -- rendering these bonuses worthless. A 'giveback' of $20 million while taking $100 million is meaningless, a continuing sign that AIG and other investment companies simply do not care about Main Street businesses and taxpayers. This arrogance should not be rewarded, and the retention bonuses should not be awarded.

"These huge windfalls for select employees while the company remains deeply in debt to taxpayers are outrageous and unacceptable and must stop."

Blumenthal said Feinberg should disregard any claim by AIG that Connecticut law prevents AIG from revising or canceling the bonuses. He said that his office studied the claim last year and found it false.

"Please be advised that any claim by AIG that Connecticut law prevents the company from reducing or eliminating these bonuses is bogus and patently false," Blumenthal said. "The company made just such an argument last year in an attempt to justify these unjustifiable payments. My office exhaustively reviewed Connecticut law, concluding that no state statute blocks reduction or elimination of these payments."