Connecticut lawmakers subpoena AIG workersHARTFORD, Conn. - A legislative committee in Connecticut wants to haul in at least a dozen employees of insurance giant AIG, including CEO Edward M. Liddy, to testify about the financial products division in Wilton.
The Banking Committee issued subpoenas on Friday commanding the employees, who are state residents they discovered in news accounts and who lawmakers believe received bonuses, to appear at a March 26 hearing.
Legislators are also seeking documents regarding the division's retention bonus plan and any related contracts. They plan to ask why $165 million in bonuses were handed out, when they were ordered and why the company is using a Connecticut labor law to justify the payments.
"This Connecticut Banks Committee is well within its jurisdiction to issue these subpoenas," said Sen. Robert Duff, D-Norwalk, the committee's co-chairman. "Not only is the CEO potentially misusing a Connecticut law, the recipients are Connecticut residents and beneficiaries of our taxpayer money."
AIG officials have partially blamed the Connecticut Wage Act for why they've paid the bonuses. The state law allows employees to sue for twice the full amount of contractually owed wages -- in this case $330 million -- as well as attorney's fees, if the employer refuses to pay up.
If the subpoenas were challenged in court but upheld, the executives could face criminal charges if they refuse to comply.
Attorney General Richard Blumenthal and Department of Consumer Protection Commissioner Jerry Farrell Jr. announced Friday that AIG has provided them with some documents pertaining to the bonuses. Neither official has released the information to the public.
Gov. M. Jodi Rell's office said the largest AIG bonus given was $6.4 million. Bonuses of more than $4 million were given to six employees while another 66 people received more than $1 million each. In total, more than 400 people in AIG's financial products division received bonuses, Rell said.
Farrell said all of the employee names have been redacted from the documents. He's trying to determine whether the bonuses violate the state's Unfair Trade Practices Act.
"Depending upon the legal conclusions we reach and whether there is a need for enforcement action, our subpoena remains active and we can still get the names, should we make a determination that they are necessary," he said.
Blumenthal urged the AIG executives to attend Thursday's hearing.
"They are Connecticut citizens, and we have a right to hear from them as to what they were supposed to do in return for these outsized, outlandish and outrageous payments," he said.
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