19 states join in AIG probe

New Jersey Attorney General Anne Milgram is leading the coalition, focusing on possible violations of New Jersey Uniform Securities Law, Insurance & Financial Advisor reported Tuesday.

Milgram, in a March 19 letter, requested AIG turn over the names of employees who received bonus checks, copies of their work contracts and the sources of the bonus pay.

At the heart of the matter is federal emergency loans totaling $170 billion and whether these funds were used to reward employees in spite of the company's massive losses.

The controversy sparked outrage in Washington, triggering lawmakers to assemble tax bills directly targeting the bonus pay.

Some AIG executives have volunteered to return their bonus pay. AIG Chief Executive Officer Edward Liddy said in congressional testimony he had received threats warning him not to reveal names of bonus recipients.

In the March 19 letter, Milgram said, "we want to ensure ... money received by the company is being utilized to improve the financial welfare of the company, not pad the pockets of the same individuals who led to the financial crisis in the first place."

Copyright 2009 by United Press International.