Stephen Blake, head of human resources for AIG’s financial services division, told state lawmakers today that employees who received bonuses in the company’s Wilton-based financial products unit were not responsible for the company’s collapse.
Blake testified before the legislature’s Banks Committee, which is looking into why AIG handed out $218 million in bonuses to employees in the financial products group after receiving $182.5 billion in federal bailout money.
Blake did not offer any new information about why and how the bonuses were paid out and sidestepped many of the questions state lawmakers asked him, including why AIG used Connecticut’s wage law as an excuse to pay out the bonuses, even after the company received taxpayer money.
Blake told the committee that he wasn’t an expert on that topic and only agreed to answer questions related to how those contracts were structured. He also refused to answer questions regarding the company’s financial performance and how the financial products unit operates.
“I can’t offer any more information than what was disclosed last week in Congress,” Blake said, referring to testimony AIG CEO Edward Liddy provided to federal lawmakers March 18.
A group of lawyers representing AIG told state lawmakers that another lawyer for the company-Patrick Shea, who also attended the hearing-could answer questions related to the Connecticut law, but the committee didn’t allow him to speak.
Sen. Bob Duff, (D-Norwalk) co-chairman of the bank’s committee, said he was not aware that Shea was going to attend the hearing.
“He was a surprise witness,” Duff said. “We didn’t know he was testifying.”
Republican lawmakers criticized Democrats and Attorney General Richard Blumenthal for holding the hearing and issuing subpoenas — calling the entire process a waste of time.
“I’m still trying to figure out what the point is other than certain legislators trying to get press attention,” said Senate Minority Leader John McKinney, (R-Fairfield). “I don’t think we learned anything new.”
“A wasted two hours is what I got out of this,” added Rep. William Hamzy (R-Bristol), who is a member of the banks committee. “I still have no idea what the scope of the hearing is.”
Duff defended the hearing, saying it gave him a better understanding of how and why the bonuses were paid out.
“I believe that this hearing has been very useful to us,” Duff said. “There hasn’t been a bombshell, but I don’t think we were expecting one. This is a beginning to the process and not an end.”
