Dems Push Subpoenas for AIG Employees, Continue to Ignore Budget

HARTFORD — House Republican Leader Larry Cafero today lashed out at inaction from legislative Democrats who insist on proceeding with attempts to grill AIG employees who got bonuses recently instead of fixing a state law the company cited in handing them out.

Even worse, Democrats have proceeded on this path — which Cafero compared to Geraldo Rivera’s examination of Al Capone’s tomb — as the state’s budget defict grows.

Cafero, with Senate leader John McKinney, said Democrats have skirted their obligation to the very people who elected them by missing an important self-imposed Appropriations Committee deadline identifying the $220 million in cuts Democrat leaders promised when the last deficit mitigation plan passed on February 25th.  Cafero and McKinney said that the Democrats’ failure to identify the cuts will further jeopardize efforts to balance the FY09 deficit.

The AIG bonuses have drawn fire from people throughout the country. Many around the Capitol believe the Democrat-lead hearing Friday will amount to a kangaroo court unable to solve anything.

The Republicans charged that Democrat leaders are using tomorrow’s AIG bonus hearing as a distraction from their inaction on the budget crisis. The Republicans also charged that Democrats are holding up a host of other important votes, including:

• Changing Connecticut statute in accordance with federal guidelines to access $58 million in federal funds for unemployment insurance;
• Streamlining the DEP permitting process to accelerate the economic stimulus projects that Governor Rell has identified as critical to protecting and creating Connecticut jobs; and
• Fixing the Connecticut Wage Act    

In addition to action on the state budget deficit, Republicans want to correct a flawed sate law that AIG has been using to justify giving executive bonuses totaling at least $165 million. The Republican proposal would eliminate provisions that could result in fines equal to double or triple the amount of the original bonuses if the company does not live up to the terms of agreed upon contracts with workers. 

Federal Reserve Chairman Ben Bernanke Tuesday cited Connecticut law as the reason he could not sue to stop the bonuses.

McKinney said, “On February 25th, Democrats passed a law that required the chairpersons of the Appropriations Committee to find $220 million in cuts from off-budget accounts by March 25th.  They haven’t found the savings and are therefore in violation of their own statute,” McKinney said.  “We are more than halfway through the 2009 legislative session and the FY09 deficit still looms increasing the threat to the state’s rainy day fund and increasing the likelihood Democrats will rely on broad-based tax increases to balance next year’s budget.”

“We need swift action on all these issues – fix the Connecticut law AIG has been using as an excuse to hand out huge executive bonuses, get the federal unemployment insurance and streamline our DEP permitting process so we can move ahead on ‘shovel ready’ economic stimulus projects,” said Cafero, R-Norwalk. “Instead, we’re wasting more time doing nothing and the state budget is still in crisis.”

Later in the day the Hartford Courant reported that an AIG human resources employee — not among the bonus recipients — agreed to testify. Cafero, though, argued the legislature should focus its efforts on changing the law AIG and Bernanke cited instead of talking to the company that gave them about how to prevent it from happening again.