Click here to read Cuomo's letter on AIG bonuses.
In the months ahead, ABC's Charles Herman has noted that AIG has planned to pay out an additional $230 million in bonuses that is due to be paid for fiscal year 2009, AIG now expects to reduce that amount by at least 30 per cent.
In a press release issued by AIG about two weeks ago the company noted that "AIG has committed to use its best efforts to reduce the amounts AIG owes in respect of 2009. This will be accomplished through voluntary acts such as salary reductions, through negotiations when we sell businesses and through other arrangements over time. We believe that guaranteed payments at AIGFP for 2009 can be reduced by at least 30%."
The release also noted that "to try to cut overall pay, AIG has cut the salary of the 25 highest paid contract employees to $1 salary for 2009. Salaries had ranged up to $500,000, with average salary at $270,000. Salary of other officers cut by 10 per cent."
Armed with the broad investigative powers of New York's Martin Act, Cuomo subpoenaed the AIG compensation information and initially planned to publicize the top earners. However, when it became apparent that public outrage had triggered as spate of threats to AIG employees, Cuomo decided to reassess his position and has since kept the information private.
The hot button bonus issue is but a part of the staggering alleged abuses of public money that AIG stands accused of by members of Congress. The company also paid out one hundred cents on the dollar to companies who it had insured against the risks of highly complex financial bets.
Treasury officials and particularly Secretary Timothy Geithner have faced questions and criticisms over what they knew of the bonus program and what actions they took, or didn't take, to prevent it.
The Blotter reported last week that the Treasury Department's top watchdog had launched a probe into those and other questions. At a House hearing last Thursday Neil Barofsky, the Special Inspector General for Treasury's Troubled Asset Relief Program, announced he was launching an audit to examine who in the Federal government "knew what, how, when and why" about AIG's bonus program, Barofsky said. He will also scrutinize AIG's employment contracts, and look at how government officials monitored and enforced executive compensation at bailed-out companies.