WHITFIELD: As if there wasn't enough outrage already, we have new developments in the AIG bonus fiasco. Twenty states -- the ones you see in blue right here -- have announced official investigations into the payouts. Connecticut's attorney general has issued subpoenas for AIG's CEO, Edward Liddy, and 11 other company executives. The state's senior senator, Chris Dodd, widely criticized for allowing the bonuses in the first place, claims that he was misled by Treasury officials.
Tonight, Ali Velshi and the CNN Money team search for truth inside the AIG scandal. See what they found in AIG: Facts & Fury, a CNN special report, tonight at 8 o'clock Eastern.
And because now, this has become a legal case, with the attorney general in Connecticut getting involved, among others, we thought we'd turn to our legal guys. Always great to see you. Avery Friedman, a civil rights attorney and law professor. And Richard Herman, a New York criminal defense attorney and law professor, good to see you as well.
HERMAN: Hi, Fred.
FRIEDMAN: Good to see you.
WHITFIELD: OK, Richard I'm going to begin with you because, you know, you've been away from [unintelligible] for a while, so I'm going to begin with you on the heavy lifting with AIG. Why is this now a case that the attorney general would get involved in -- at least in Connecticut?
HERMAN: It's not, Fred. It's pathetic. It's absolutely pathetic. The 10-Q filings by AIG before they voted on the stimulus reflected these bonuses payments would be made. The stimulus package specifically included these bonus payments to be made. Congress voted on that and approved this package, although the Congress probably never read the proposal that they voted for.
Then, pursuant to the congressional action approving the stimulus and the contracts existing at AIG, the bonuses were paid. Well, all of a sudden, Congress says, “How could you pay those?” Congress authorized it. That was a fiasco the other day. It was disgusting.
WHITFIELD: So this is not a legal case. You say this doesn't belong in court?
HERMAN: There is no legal case for these bonuses.
FRIEDMAN: Right, right.
HERMAN: They were entitled to be paid.