AIG faces probe for 'outrageous expenditure'

American International Group, the US insurer rescued in a taxpayer-funded $85bn(£49bn) bailout last month, is facing an investigation for 'unwarranted and outrageous expenditures' after the company paid huge executive bonuses and spent £50,000 on a UK shooting trip.

In a letter to AIG's board of directors, New York attorney general Andrew Cuomo
demanded the company stop 'extravagant' expenditures and recover millions of dollars in unreasonable payments, or face legal action, the Evening Standard reports.

'The party is over,' Cuomo said after discovering a $5m bonus and a $15m golden parachute had been given to Martin Sullivan, the Essex-born former chief executive, last March. 'No more hunting trips. No more luxury resorts. They are not going to have the party and leave the hangover for the taxpayers.'

Cuomo has also demanded an accounting inspection of AIG's executive ompensation and benefits since January 2007. He said the government's financial rescue of AIG made the expenditures 'even more irresponsible'.

Further reading:

Ex AIG chief blames mark-to-market for losses

PwC settles AIG lawsuit

Read the Evening Standard story