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• Monday, March 16, 2009 08:47 PM

  bystander, this may shed some light

  On what Horton said:

  New York Attorney General Andrew Cuomo said he will subpoena American International Group Inc., the insurer that got a $173 billion taxpayer bailout, for information on employees who he said were sent bonuses March 13.
  
  Cuomo said in a conference call that the New York-based insurer claims it had to make the retention payments because of employment contracts.
  
  “If the taxpayer didn’t bail out AIG, those contracts wouldn’t be worth the paper they’re printed on,” Cuomo said. “Just because there’s a contract doesn’t mean there’s no way around the contract.”...
  
  Cuomo said the company may have violated New York laws prohibiting so-called fraudulent conveyances. If a company enters into contracts in which it agrees to pay funds it “effectively doesn’t have, it’s akin to a looting of a company,’’ he said.
  
  If the AIG contracts were signed when people involved knew “the finances were going south,” it could lead to fraudulent conveyance, Cuomo said.
  
  Cuomo declined to comment on whether he was examining AIG’s retention bonuses outside the financial products’ unit.

  http://www.bloomberg.com/apps/news?pid=20601087&sid=aU1d040FM6L0&refer=home

  Other ideas for dealing with the bonuses:

  "One idea we're kind of thinking about is a tax provision," the Connecticut Democrat [Chris Dodd] said. "We have a right to tax. You could write a tax provision that's narrowly crafted only to the people receiving bonuses. That's a way maybe to deal with it."
  
  Dodd said the notion is in the "earliest of thinking" and has not been settled on as a way to resolve the issue that has set off outrage in Washington and across the country.
  
  In the House, Democrats are trying to shame AIG executives into forgoing the bonuses. They're also investigating possible legal avenues Congress can take to force the company to return money used for bonuses, a House Democratic leadership aide and a House Financial Services Committee aide said Monday.
  
  The committee is trying to determine whether Congress can force AIG to renegotiate the bonuses, which the company says it is legally required to give employees under contracts negotiated before the company received its first infusion of bailout dollars in September, according to the committee aide.
  
  Both aides said it is unclear what authority Congress might have to force AIG to take back the bonuses.

  http://www.cnn.com/2009/POLITICS/03/16/AIG.bonuses/index.html

  —EJ Read EJ's other letters
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