Attorney General Cuomo added, ‘These actions are not intended to jeopardize the hard-earned compensation of the vast majority of AIG’s employees, including retention and severance arrangements, who are essential to rebuilding AIG and the economy of New York’.

The authors go on to meticulously detail squirming in March and April from Cuomo in response to reporters’ attempts to look into this.  Read it.

Today’s decision in the Bank of America case is a victory for taxpayers.  Let the sun shine in.  Justice Fried’s decision will now lift the shroud of secrecy surrounding the $3.6 billion in premature bonuses Merrill Lynch rushed out in early December.  Taxpayers demand and deserve transparency and now they will finally get it.  Bank of America chose litigation over transparency and we are gratified that this tactic has failed.  AIG should take heed and immediately turn over the list of bonus recipients we have subpoenaed.  The deadline for responding to our subpoena is tomorrow.  More litigation is not the answer — it is time for AIG to come clean.

While Congress pokes and prods, and while Treasury reacts (too slowly) with anger to each happening, Cuomo and his office have the nimbleness and political will to take action and making things happen.

Liddy, your move.

He also shared the shocking news that he has seen the bad side of capitalism in his time in business.  Mmhmm.

Who are these pink sign people?  Kanjorski is not having it.  He had them surrender their signs to Capitol police.  They’re the “Code Pink Ladies,” per Andrea Mitchell.

Oh, Barney … “Thanks goodness no one had slogans printed on their shirts.”

Rep. Paul Hodes (D-NH): AIG now stands for “Arrogance Incompetence Greed.”  Ha.

Rep. Judy Biggert (R-IL) wants to know if the taxpayers got to vote on the bonuses.  Cutesy, but I like it.

Andrew Ross Sorkin, whose DealBook column today I discussed earlier, was on Hardball this evening, opposite Pat Buchanan.

I’m really not quite sure what just happened, but I think I sat here — for the most part — agreeing with Pat.  His argument was that others have had to take a hit in this economy, so why shouldn’t the very people who caused some of the significant problems of this crisis.

Sorkin and Buchanan on Hardball today.

I also was glad to hear Buchanan call out the idea, defended by Sorkin, that these are “the best and the brightest,” as AIG CEO Liddy argued in his letter to Treasury Secretary Geithner.  The best argument, advanced by Sorkin, is that no one really wants to work for AIG right now — but Buchanan is right that it probably shouldn’t take a $3 million bonus to be able to find someone to help “wind down” the Financial Products division, as Liddy apparently intends to do.

His throw-away line that the auto unions “negotiated” changes in their contract and didn’t have them altered unilaterally misses the point that they were forced to change their contracts.  OK, fine, let’s “negotiate” with these folks at AIG Financial Products, name them publicly and let folks run TV ads against them, and see how things turn out.  In the end, that’s basically what Sorkin recommends:

Mr. Cuomo wants to know who A.I.G.’s lucky employees are, and how they have been doing at their jobs. So here is a suggestion for him. Get the list, and give those big earners at A.I.G. a not-so-subtle nudge: Perhaps they will “volunteer” to give some of their bonuses back or watch their names hit the newspapers. But in the meantime, despite how offensive and painful it might be, let’s honor the contracts.

So, why kick the auto union example in a throw-away parenthetical if it’s basically your model for how to handle this?

My problem is that, unlike the unions, I question whether these folks at AIG are subject to shaming principles.

It was unclear what legal options the government can pursue to stop the bonus payments. Monday afternoon, a White House official said the Treasury Department will use a planned $30 billion infusion into AIG to compel the company to repay the bonuses promised to employees of its financial-products group, which is responsible for selling the exotic financial instruments that brought the company to near-collapse.

The infusion, announced March 2, won’t be finalized until the company and the Treasury work up repayment options, the official said. The bonuses to the financial-products division were “found to be completely unacceptable given that AIG is already surviving on taxpayer funds,” the official said.

Oops.  Next time you tell Treasury to screw off (see here), maybe you should make sure your last allowance had hit your bank account before you do so.

[P.S. - You knew Cuomo couldn't stay away for long: "Cuomo to Subpoena A.I.G. for Bonus Information." [DealBook @ NYT]]

Here’s the letter, per TPM, sent on Saturday from AIG CEO Edward Liddy to Treasury Secretary Timothy Geithner.  It is over-the-top absurdity.  The disconnect from reality is impressive.  The best/worst two lines of the three-page letter:

On the one hand, all of us at AIG recognize the environment in which we operate and the remonstrations of our President for a more restrained system of compensation for executives.  On the other hand, we cannot attract and retain the best and brightest talent to lead and staff the AIG businesses — which are now being operated principally on behalf of the American taxpayers — if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.

What a load of bullshit.  The Obama sentence — “our President” — is laughable window dressing, practically dripping with sarcasm.  Obviously, Liddy, you do not recognize the environment in which you are operating.

The second sentence, incredibly though it might seem, is even further disconnected from reality.  If this is “the best and brightest talent,” it’s time to go home.  The parenthetical offset about how AIG is now being operated “on behalf of the American taxpayers” is as incendiary a phrase as I’ve ever recently seen.  (OK, that might have been a bit overstated, but it’s one of the more incendiary phrases that I can imagine seeing on corporate letterhead these days.)  It’s a slap across the face.  This was not a business that was running well that we decided to invest in; this was a business running so poorly that we had to come in and save it.  Everything that came before that bailout should be on the table and open for discussion — including executive compensation.

But, no, Liddy’s not done yet.  He has to get in one more irrational concept — that Treasury’s problems with these bonuses is “arbitrary.”

Are you insane, Liddy?

Right, any decision to cut the bonuses of executives at a company that has received three different bailouts from the federal government in the past six months to keep it afloat would be seen as arbitrary.  These “best and the brightest” financial wizards wouldn’t be able to connect the dots and figure out why their bonuses were slashed?  They wouldn’t be able to put their pay in context of the times, both of their company and of the country?

Complete.  Bullshit.

Luckily, it appears that our President does get it.  President Obama, per The Washington Post, has called for Secretary Geithner to “pursue every single legal avenue to block these bonuses” and has said that this is about our “fundamental values.”

[UPDATE: Follow-up on Treasury's possible response here.]