That NY Attorney General Andrew Cuomo is not playing around. He took AIG to task yesterday for receiving billions in government bailout money—$85 billion and then another loan for $37.8 billion—and still holding its already-planned fancy executive conferences and continuing to pay out outrageous severances. On Thursday the company had a come to Jesus, or rather a come to Cuomo. Upshot: We’re going to change our wicked, wicked ways!
Bloomberg: American International Group Inc., following criticism by New York Attorney General Andrew Cuomo, won’t honour a $10 million severance agreement with outgoing Chief Financial Officer Steven Bensinger, Cuomo said.
Cuomo met with AIG’s new Chairman and Chief Executive Officer Edward Liddy today, the attorney general said. Liddy agreed to provide an accounting of all compensation paid to AIG’s senior executives and assist in recovering any illegal expenditures, Cuomo said. The payments include those made to ex- CEO Martin Sullivan and Joseph Cassano, former head of the financial products unit for the New York-based insurer.
…The attorney general also noted in his letter that an unnamed top-ranking executive, “who was largely responsible for AIG’s collapse” and was fired in February, was allowed to keep $34 million in bonuses. Cuomo said the executive also apparently continued to receive a $1 million a month from the company until recently.
The executive he referred to, Cassano, was head of AIG’s financial-products unit until his retirement was announced Feb. 29. The business sold credit-default swaps, the contracts that plunged in value as the mortgage securities they guaranteed declined, causing more than $25 billion in writedowns at AIG.
Cuomo claimed in his letter yesterday that AIG’s expenditures violated the state’s debtor-creditor law.
And the perks and junkets that won’t be happening?
…. The company will be cancelling more than 160 conferences and events, some exceeding more than $750,000 per event, which Cuomo’s statement will result in a savings of more than $8 million.
NYT: Among the events that A.I.G. has agreed to cancel are a $750,000 “best operator” event in Las Vegas and a $500,000 risk management conference scheduled for the Ritz Carlton in Half Moon Bay, near San Francisco. The company will also cancel a $350,000 sales conference in November at Sea Island, Ga., and a $190,000 meeting scheduled for Scottsdale, Ariz., in January.
See Also: AIG’s $86K Bird Hunt Boondoggle
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