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Governor Rell: AIG Subpoena Documents Delivered to Commissioner of Consumer Protection
Governor M. Jodi Rell announced that AIG has provided the Department of Consumer Protection with contract documents – in accordance with a subpoena issued Thursday – relating to the $165 million in bonuses given out by its financial products division.
On Wednesday, Governor Rell ordered Commissioner Farrell to issue the subpoena to AIG as part of an investigation into how the company’s bonuses might be voided. AIG had cited Connecticut law in saying the bonuses were required by contract.
“With this information, we will determine how the contracts were crafted and whether they violate any provisions of the Connecticut Unfair Trade Practices Act,” Governor Rell said. “The Act includes language that addresses actions that may be ‘against public policy’ and that will be one key area of the review.
“The public policy Congress intended when it enacted the Troubled Asset Relief Program was to provide bailout funds – that is, taxpayer money – in order to stabilize financial companies and restore the flow of credit to consumers,” the Governor said. “That money was never intended to provide windfalls to the very people whose greed and lack of oversight led to the implosion of our financial markets.
“I am pleased that we obtained these documents quickly, given the seriousness of this issue,” Governor Rell said. “The documents will be scrutinized closely and we will report our findings as soon as the investigation is complete.”
The largest AIG bonus given was $6.4 million; bonuses of more than $4 million were given to six employees, the Governor said. Another 66 people received bonuses of more than $1 million each. In total, more than 400 people in AIG’s financial products division received bonuses. All employee names have been redacted from the documents, according to Commissioner Farrell.
“For the purposes of our current investigation into the overall legality of these documents, the names of the recipients are not necessary at this time,” Farrell said. “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.”
The Connecticut Unfair Trade Practices Act, codified as Connecticut General Statutes Section 42-110a, was enacted in 1973.
On Wednesday, Governor Rell ordered Commissioner Farrell to issue the subpoena to AIG as part of an investigation into how the company’s bonuses might be voided. AIG had cited Connecticut law in saying the bonuses were required by contract.
“With this information, we will determine how the contracts were crafted and whether they violate any provisions of the Connecticut Unfair Trade Practices Act,” Governor Rell said. “The Act includes language that addresses actions that may be ‘against public policy’ and that will be one key area of the review.
“The public policy Congress intended when it enacted the Troubled Asset Relief Program was to provide bailout funds – that is, taxpayer money – in order to stabilize financial companies and restore the flow of credit to consumers,” the Governor said. “That money was never intended to provide windfalls to the very people whose greed and lack of oversight led to the implosion of our financial markets.
“I am pleased that we obtained these documents quickly, given the seriousness of this issue,” Governor Rell said. “The documents will be scrutinized closely and we will report our findings as soon as the investigation is complete.”
The largest AIG bonus given was $6.4 million; bonuses of more than $4 million were given to six employees, the Governor said. Another 66 people received bonuses of more than $1 million each. In total, more than 400 people in AIG’s financial products division received bonuses. All employee names have been redacted from the documents, according to Commissioner Farrell.
“For the purposes of our current investigation into the overall legality of these documents, the names of the recipients are not necessary at this time,” Farrell said. “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.”
The Connecticut Unfair Trade Practices Act, codified as Connecticut General Statutes Section 42-110a, was enacted in 1973.
posted by Register Citizen Staff at
8:19 AM
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