Change to CT law may stop AIG bonuses

Hartford (WTNH) - No one seems to know how to stop AIG from giving away taxpayer's money in the form of bonuses to executives. But the Republican leader in the Connecticut House of Representatives said it could be as easy as a quick amendment to a Connecticut Statute.

Everyone from the President on down is looking for a way to keep AIG from dispensing more bonuses to employees. And a member of the Connecticut General Assembly said he's found the way.

Even though AIG is an international company, the Financial Products Division, the one dispensing all the bonuses, is based in Wilton, Connecticut. The company revealed if it doesn't live up to its agreed upon bonuses, Connecticut law makes them liable for double the amount.

It's contained in the Connecticut Wage Act which said, in part, "When any employer fails to pay an employee wages (as in a contractual agreement) such employee may recover in a civil action, twice the full amount of such wages."

The Minority Leader of the Connecticut House of Representatives is proposing a quick change in the law.

"To exclude from that double penalty provision of our general statutes with regard to withholding of wages that we exclude bonuses and retention bonuses that are paid by employers who are recipients of TARP or federal money," said Minority Leader Larry Cafero.

AIG is hoping to get another $30 billion in federal taxpayers money and is reportedly on the hook for another $230 million in bonuses this year.

"We should change the law in the state of Connecticut immediately and say to AIG there are no damages under Connecticut law any longer for your failure to give out those bonuses, so don't give them out," Sen. John McKinney said.

Attorney General Richard Blumenthal revealed he's preparing subpoenas of AIG documents but is ready to support this idea.

"I would support any measure that gives us greater enforcement authority against these kinds of clearly excessive, outrageous bonuses, rewards for failure," Attorney General Blumenthal said.

"We're taking our cue from President Obama who said, 'let us all use every legal means necessary to stop this kind of abuse,'" said Rep. Cafero.

A spokesman for the Democratic leadership said they share the outrage on this issue and are open to Cafero's idea and will have their lawyers look at it for possible consideration as soon as possible.

Governor Rell issued a quick statement from Denver where she is vacationing saying she strongly supports this idea.