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AIG Exec To Appear Before Conn. Lawmakers

Connecticut legislators will be asking an executive from American International Group Inc. why the insurer handed out $165 million in bonuses after receiving federal bailout money.

The legislature's Banks Committee has a hearing set for 1 p.m. Thursday and plans to question Stephen Blake, head of human resources for AIG's financial products division in Wilton, Conn.

Lawmakers took up the issue because officials at New York-based AIG say they paid the bonuses partly because of a Connecticut law. That law allows employees to sue for twice the full amount of contractually owed wages and lawyers' fees, if the employer refuses to pay.

State Attorney General Richard Blumenthal says AIG was wrong to cite Connecticut wage laws in justifying the bonuses.

The bonuses have been a source of outrage in political circles. Last week, lawmakers on Capitol Hill prodded AIG CEO Edward Liddy to release a list of bonus recipients. Liddy characterized the payments as "distasteful," and stressed the fact that the contracts authorizing them were signed before he took the helm of the troubled insurance giant.

On Wednesday, an executive fromm the Financial Products division, which is widely seen as the source for AIG's financial distress, publicly released his resignation letter in the New York Times. Jake DeSantis said he felt "betrayed" by Liddy and Congress and insisted he and many others at AIG had nothing to do with the credit default swap transactions that plagued the company, yet they were being demonized in the public.

The letter, ostensibly a plea for public sympathy, left's Brian Montopoli feeling it was yet another example of Wall Street's tone-deaf culture.