$53 Million More Reasons to Be Angry About AIG

This is a rush transcript from "On the Record ," March 23, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: There's breaking news tonight about AIG. New York attorney general Andrew Cuomo just announced 15 out of the top 20 people who got bonuses from AIG are giving back the money. That's to the tune of $30 million. Now, it's not the total amount of bonuses, but there is more. You might have 53 million new reasons to be on fire when you hear the three letters AIG. According to the Connecticut attorney general, we all made a mistake when we reported AIG gave $165 million of bonuses. It was not $165 million. It was more. Try $218 million, $53 million more than we originally reported.

And there's still more tonight. Over the weekend, a busload of 40 protesters showed up at the Connecticut homes of some AIG executives. Check out this tape. The protesters were not too happy. Some of them reportedly were chanting, Money for the needy, not for the greedy.

Joining us live in Connecticut is attorney general of that state Richard Blumenthal. Good evening, sir. And tell me, what is your level of certainty that we got the number wrong on these bonuses? How did you get a different number?

RICHARD BLUMENTHAL, CONNECTICUT ATTORNEY GENERAL: We got a number different from the $165 million, much higher than that number, which had been the number previously accepted, widely reported, never denied by the company, from the company's own documents that we requested and subpoenaed. The number was right there.

I know the company says it's old news, but it was news, certainly, to a lot of taxpayers, citizens, congressmen and others who read that day in most publications that the number was $165 million. And I'm delighted, by the way, that my colleague, Andrew Cuomo, is announcing that some of that money is coming back. Of course, those executives, many of them, announced they were returning the money several days ago, but it's still a fraction of the total.

VAN SUSTEREN: I take it you're not happy with these bonuses, is that right?

BLUMENTHAL: I'm not happy with the bonuses for a number of reasons. First of all, you know, they rely apparently very mistakenly on Connecticut law. That's the reason they've given they were compelled by Connecticut law, which is just plain bogus because Connecticut law protects -- we do have a Wage Protection Act -- only wages, not bonuses.

And second, you know, I am, like everyone else, very angry that taxpayers are not only bailing out the company but that some of that money going to AIG is, in effect, rewarding failure and the people who made enormous sums by taking irresponsible risks.

VAN SUSTEREN: Are you annoyed at the Congress, though? I mean, Congress is the one that had the opportunity last fall, when it made the decision to bail out AIG, to take a look, maybe do some restructuring, even throw it into receivership. But instead, it seems like Congress sort of never bothered, and you know, whether -- you know, these executives, they'd cut a deal, a business deal with company. Don't you -- don't you blame sort of more Congress asleep at the wheel last fall, I mean -- or not?

BLUMENTHAL: Oversight by Congress was certainly lacking, no question about it, Greta, and...

VAN SUSTEREN: Lacking or nonexistent?

BLUMENTHAL: Well, it will a lot more strong now than it was before. Maybe nonexistent on this point, although the issue did arise, as we know now. And the secretary of the Treasury...

VAN SUSTEREN: How about incompetent? How about incompetent? Would you go that far...


VAN SUSTEREN: ... that they didn't even bother to do anything about it?

BLUMENTHAL: I would...

VAN SUSTEREN: Incompetent or not?

BLUMENTHAL: I would never use a word so disrespectful of a public official, naturally. But I think the system certainly...

VAN SUSTEREN: Well, I -- you -- I admire public officials immensely on both sides of the party, and I -- you know, I like a lot -- you know, a lot of these members in Congress, I see them all the time. But it's $165 million, maybe $200-some million, according to your calculations. Somebody didn't do something, and there are a lot of unemployed people around here, so I hate to use harsh words, but they never even bothered to look at it or consider it, and they're voted by their constituents to come to Washington to protect them, so...

BLUMENTHAL: And that's the reason for this populist rage that we see now, that executives have been overpaid. Congress has refused to exercise oversight for years and years, failed to impose regulatory oversight. And folks out in the hinterlands like myself have been calling for a stronger oversight system that will impose some discipline on these credit default swaps and derivatives obligations, all the instruments that led to risk taking, enormous risk taking, along with enormous compensation, and other people's money used for both.

VAN SUSTEREN: And I see the states Arizona, Delaware, Illinois, Kentucky, Louisiana, Montana, Maine, Michigan, Mississippi, Montana, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Washington, West Virginia and Connecticut -- you're all going after -- you're all investigating this now, right? So I guess they'd better run,

BLUMENTHAL: We are filling the gap which you absolutely correctly have observed was left by the federal government. That gap traditionally is filled by the states. As you know, states often enter a vacuum when there's a lack of proper law enforcement.

VAN SUSTEREN: And I got to go, but I hope you'll come back. Thank you for joining us, sir. Always nice to see you.

BLUMENTHAL: Thank you, Greta. Good to see you. Thank you.

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