New York Attorney General Questions
The economy has been on the forefront of people’s minds for quite a while now, and the injection of federal funds into American International Group has New York state’s Attorney General Andrew Cuomo launching a probe into “unwarranted and outrageous expenditures”. Mr. Cuomo sent a cease and desist letter to AIG’s board of directors today in regards to their perceived over the top spending.
In a letter to AIG’s board of directors Wednesday, Cuomo said his office is looking into the expenditures, which he called "irresponsible and damaging" given the lifeline the insurance giant received from the U.S. government.
The attorney general called on AIG’s directors to cease and desist any such further expenditures and review, rescind and recover all past unreasonable expenditures. Cuomo said his office would take legal action if AIG’s board failed to cooperate.
"In the last several months, as AIG was teetering toward bankruptcy, and operating with unreasonably small capital, AIG nevertheless made numerous extraordinary expenditures in the form of executive compensation payments, junkets and perks for its executives," Cuomo said.
There were several expenditures in particular that Mr. Cuomo pointed out as “extraordinary” such as cash bonuses to executives and money spent on luxury retreats for employees. Mr. Cuomo believes the expenditures violate New York state law and requested that the board of AIG supply the office of the attorney general with accounting documentation dating back to January 2007.
October 29th, 2008 at 9:50 pm
[...] warning AIG about using federal bailout money as rewards for executives, New York Attorney General Andrew Cuomo has cautioned nine other banks about using government [...]