New York Attorney General Andrew Cuomo says American International Group Inc. recently paid bonuses of $1 million or more to 73 employees, including 11 who longer work for the company.
In related news, members of Congress today began to respond to Main Street anger about payment of bonuses to AIG employees by disclosing plans to introduce legislation that would claw back the bonuses through punitive taxes.
Cuomo disclosed the information about the bonus recipients in a letter to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
Cuomo had subpoenaed the information from AIG Monday in an effort to determine whether the payments constitute fraud under state law.
Cuomo says contracts written in March 2008 guaranteed employees 100% of their 2007 pay for 2008, regardless of their performance.
Cuomo says the top recipient received more than $6.4 million; 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million; 73 individuals received bonuses of $1 million or more; and 11 of the individuals who received “retention” bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million
In the House, Rep. Steve Israel, D-N.Y., introduced a bill that would impose a 100% tax on the bonuses.
“If we can’t kill the bonuses, we’ll tax the bonuses,” Israel said in a statement.
Rep. Carolyn Maloney, D-N.Y., head of the Joint Economic Committee, said she is introducing another bill to apply a special tax to the bonuses.
In the Senate, Sen. Max Baucus. D-Mont., chairman of the Senate Finance Committee said at a hearing that he is drafting a bill to claw back “some” of the bonus money. The tax could be as high as 91%, sources said.
“We are looking at tax options that will reclaim the outrageous bonuses paid by AIG,” Baucus said, adding that the measure will be unveiled shortly. “What’s the highest excise tax we can impose that will stand up in court?”
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, earlier had suggested some form of taxation as a means of recouping the bonuses.