BusinessBusiness RecoveryAIG faces probe for ‘outrageous expenditure’

AIG faces probe for 'outrageous expenditure'

AIG faces probe for 'unwarranted and outrageous expenditure after paying huge executive bonuses

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

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