CROOK NEWS: AIG Flaunted Campaign Contributions Limits AND got a nice settlement from Spitzer recently http://sfgate.com/cgi-bin/article.cgi?f= /news/archive/2006/03/27/financial/f120106S62.DTL&type=business
AIG reportedly got around donation limit Insurer used subsidiaries to donate hundreds of thousands to New York candidates such as Pataki and Spitzer, despite $5,000 limit. September 19 2006: 7:21 AM EDT
NEW YORK (CNNMoney.com) -- Insurer American International Group has used its broad range of subsidiaries to donate more than the $5,000 limit on corporate contributions to New York state political candidates, according to a published report.
The New York Times said that by having the donations come from little-known subsidiaries, AIG (Charts) was able to give hundreds of thousands of dollars to candidate such as New York Gov. George Pataki, who is reportedly eyeing a run for president, as well as New York Attorney General Eliot Spitzer, who subsequently investigated AIG and its top officers. N.Y. Gov. George Pataki reportedly received $335,000 in donations from AIG and its subsidiaries, despite a $5,000 limit on contribution to New York state political candidates from any one company.
Gov. George Pataki reportedly received $335,000 in donations from AIG and its subsidiaries, despite a $5,000 contribution limit to New York state political candidates from any one company. N.Y. Attorney General Eliot Spitzer reportedly received $50,000 from AIG and its subsidiaries before he began an investigation of the company. N.Y. Attorney General Eliot Spitzer reportedly received $50,000 from AIG and its subsidiaries before he began an investigation of the company. The paper said that the company used 10 different subsidiaries to donate $50,000 to Spitzer in December 2003. It has not made any contributions to Spitzer, now a candidate for governor, since he conducted an investigation that led to the ouster of AIG Chairman and CEO Maurice "Hank" Greenberg, the paper reported. Spitzer's probe accused Greenberg and AIG of manipulating its accounting practices to raise its stock price.
Pataki received $335,000 from AIG and 33 subsidiaries through six sets of donation, the paper reported. The use of subsidiaries to make multiple contributions and get around the campaign donation limits complies with the law as interpreted by the State Board of Elections, the paper reports. A spokesman for AIG defended the donation to the paper.
The checks used to make the donations were from a common corporate account and often were even sequentially numbered. AIG spokesman Joe Norton told the paper that the contributions are charged back to each subsidiary's budget, so that, ultimately, the money comes from the subsidiaries. He said the decision on the contributions were made by AIG. "There's no requirement that decisions about contributions be made by the subsidiaries," Norton told the paper. "The parent company can recommend that a contribution be made."
Campaign finance reformers told the paper the donations violated the spirit if not the letter of the state's campaign finance law. "This is definitely one of those cases where it fails the common-sense test," Rachel Leon, executive director of Common Cause New York, told the paper.
In 2004, Spitzer probes of AIG and insurance broker Marsh & McLennan (Charts), then headed by Greenberg's son, forced both companies to replace their CEO's. Spitzer's campaign told the paper its policy is not to accept contributions from anyone who is the subject of an investigation by the attorney general's office, but that it will not return contributions made by companies or individuals before they come under investigation.
ALBANY, N.Y. (AP) -- Despite state laws that limit corporations from giving more than $5,000 a year to political candidates, insurance giant American International Group Inc. has used a loophole to let its subsidiaries give many times that limit to politicians who regulate their business, a newspaper reported Tuesday.
AIG used 33 subsidiaries in recent years to give $335,000 to three-term Republican Gov. George Pataki; $50,000 to state Attorney General Eliot Spitzer, the Democratic front-runner for governor; and $25,000 to Democratic Comptroller Alan Hevesi, according to The New York Times.''That happens all the time,'' said Rachel Leon of New York-Common Cause, which for years has lobbied to reform this and other campaign finance practices. ''It's just one of the many loopholes that make our campaign finance laws meaningless,'' she said. ''We might as well not have any limits because in the real world, they don't apply.''
A spokesman for the state Board of Elections, Lee Daghlian, said his office is not looking into the contributions. ''As far as I can see, it's within the parameters of our law,'' Daghlian said. The corporate limits were created in the mid-1970s to restrict the influence of companies on candidates, he said.
AIG spokesman Joe Norton didn't immediately respond to a request for comment Tuesday. Norton told the Times that the donations by subsidiaries, many of them in sequentially ordered checks drawn from a common account, are charged back to the subsidiaries. He said AIG usually decides which candidates will receive donations.
The contributions in 2003 to Spitzer, the two-term attorney general, were made before Spitzer investigated AIG and its then CEO, Maurice ''Hank'' Greenberg. AIG, one of the world's largest insurance companies, announced in February that it would pay $1.64 billion to resolve allegations that it used deceptive accounting practices to mislead investors and regulatory agencies. The settlement did not cover Greenberg, who resigned in March 2005 and is fighting Spitzer in court.
Another major concern of Common Cause is companies that are organized as limited liability corporations. The LLCs aren't subject to the $5,000 corporate limit, but instead are treated as individuals and may contribute as much as $50,100 to a candidate. ''Both loopholes are just another example of how New York campaign finance law is almost completely useless,'' said Common Cause's Liam Arbetman.
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