Connecticut warns AIG: Wage law may not shield bonuses

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Connecticut’s attorney general today warned American International Group against hiding behind a state law that governs corporate compensation practices.

‘I have significant doubts about the validity of AIG’s claims that they are required by Connecticut law to pay these outrageous bonuses,’ Atty. Gen. Richard Blumenthal said in a statement.

AIG’s financial products unit is based in Wilton, Conn. The company has said that, under the state’s Wage Act, an attempt to renege on the retention bonuses that were contractually promised to employees could leave AIG liable for double the $165 million owed.

But Blumenthal said the Wage Act was ‘a joke of a justification for squandering scarce taxpayer resources.’

He said his office would ‘carefully investigate the merits of AIG’s claims under the Connecticut Wage Act, and will take every step necessary to fight this gross misuse of taxpayer money.’

Legislative leaders in Connecticut were moving today to change the law so similar bonuses wouldn’t be shielded in the future, the Hartford Courant reported.

-- Tom Petruno