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Cuomo probes AIG counter-party payments

Cuomo probes AIG counter-party payments
New York Attorney General Andrew Cuomo (UPI Photo/Laura Cavanaugh) | License Photo

NEW YORK, March 26 (UPI) -- New York Attorney General Andrew Cuomo says he will look into whether American International Group Inc. improperly used U.S. funds to make some investors whole.

Cuomo, who is already investigating AIG payment of retention awards to executives in its financial products group, said Thursday he plans to subpoena the troubled insurance giant to get information about its credit-default swaps, The Wall Street Journal reported.

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"CDS contracts were at the heart of AIG's meltdown," Cuomo said in a statement. "The question is whether the contracts are being wound down properly and efficiently or whether they have become a vehicle for funneling billions in taxpayers dollars to capitalize banks all over the world."

Cuomo said he would examine whether counter-parties including Goldman Sachs, Deutsche Bank and Societe Generale improperly received billions of dollars from AIG, The New York Times reported.

Goldman Sachs received $12.9 billion, while Deutsche Bank of Germany and Societe Generale of France each got almost $12 billion.

The company did make whole some investors in other transactions that were overseen by the Federal Reserve.

AIG has received $170 billion from the federal government to keep it from going into bankruptcy and further roiling financial markets. The company paid executives upwards of $200 million in bonuses, prompting outrage in Congress and among taxpayers.

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