(NECN: Brian Burnell, Hartford, Conn.) - AIG's Financial Products Division is based in Fairfield, Connecticut. That's the arm of the company that made the risky investments that put it on the edge of bankruptcy saved only billions of dollars in federal bailout money.
When AIG announced last year it was paying millions in executive bonuses Connecticut Attorney General Richard Blumenthal tried to stop it. He failed. Now AIG is scheduled to pay 100-million dollars in bonuses despite still owing the taxpayers 124-billion dollars. Blumenthal is trying to stop these bonuses, too, but this time something is different. Its Kenneth Feinberg, the Special Master of Executive Compensation over companies that received bailout money. Companies like AIG. Blumenthal has sent a letter to Feinberg urging him to block the bonuses.
Richard Blumenthal, D-CT Attorney General: "This federal compensation czar clearly has the power to do more to stop these bonuses and I'm continuing this fight because I believe so strongly that no bonuses should come from taxpayer funds, no company that owes TARP money or bailout money or taxpayer money should award bonuses."
But there is something else different. Blumenthal is now a candidate for the U.S. Senate seat being vacated by Chris Dodd. Connecticut Republicans say this is nothing more than a political move by Blumenthal.
Chris Healy, CT Republican Party Chair: "Dick Blumenthal a year ago tried this and he got a big laugh. He has no jurisdiction over the matter. As far as I'm concerned he could stand on his head naked in Macy's window and he's not going to get a dime for the taxpayers. It's political grand-standing."
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The Attorney General counters the Republican criticism pointing out that this is a fight he started long ago. Long before he was running for the U.S.Senate.
Richard Blumenthal, D-CT Attorney General: "I began fighting these bonuses, outrageous insults to hardworking Americans who funded the bailouts, well before I became a candidate for the United States Senate."
Last year AIG argued that it had to pay the bonuses under Connecticut law or it would violate contracts with its employees. It remains to be seen if the federal compensation czar changes that.
