Is New York Attorney General Andrew Cuomo’s probe of those AIG bonuses expanding?
Maybe kind of.
The Wall Street Journal reports (sub. req.) that Cuomo plans to subpoena AIG for documents about the credit default swaps that brought the company to its knees.
AIG has claimed that it paid those lavish bonuses because it needed to keep employees of its Financial Products unit in place, so that they could do the difficult work of unwinding the disastrous deals. But in some cases, AIGFP paid back its counter-parties in full, raising questions about how complex the job really was — and therefore, whether AIG needed to spend so much money to get their employees to stick around and do it.
Bonuses aside, the subpoena request suggests that Cuomo’s probe could end up shedding important light on the underlying question of how AIGFP managed to take on so much risk through its credit default swaps that it toppled the company and put the entire financial system at risk.
Cuomo has already obtained from AIG the list of employees who got bonuses, and has said his office is considering security concerns before deciding whether to release it.
Other investigators are also looking into the bonuses, and the swaps deals. A staffer for the House Oversight committee told TPMmuckraker earlier this week that the committee planned to soon probe the question of who at AIG knew about how the swaps were being conducted.