New Jersey Attorney General Anne Milgram is leading an effort by 10 states to pursue unresolved questions regarding bonuses paid to executives at American International Group.

Anne Milgram

Milgram said in a letter sent June 19 to the special inspector general for the U.S. Treasury’s Troubled Asset Relief Program that there are still several unanswered issues surrounding the reported $165 million given to those at AIG, including employees in the insurer’s Financial Products unit, which has largely been blamed for the company’s collapse last year. The bonuses came after AIG received $180 billion in taxpayer funds to keep it from failing and threatening substantial harm to the U.S. economy, mainly through TARP.

In March, Milgram was among a coalition of 19 state attorneys general asking whether the bonuses could violate state or other laws. She said that the states deferred to an investigation by the Inspector General’s Office “to avoid regulatory duplication that might drain federal taxpayer funds,” according to a statement.

In the letter, co-signed by attorneys general in Arizona, Delaware, Illinois, Kentucky, Maine, Michigan, Mississippi, New Mexico, Ohio, and Texas, Milgram says AIG has not been clear on how many executives have returned bonuses or even how much in extra compensation was awarded.

She cites correspondence between AIG and Rep. Elijah E. Cummings (D-Md.) indicating it paid $120 million in bonuses company-wide, but then later the insurer quoted a figure closer to $454 million. Cummings has criticized AIG repeatedly for its problems.

“AIG claims the discrepancy is explained by Congress’ failure to pose the March compensation question with sufficient precision,” Milgram wrote to Inspector General Neil M. Barofsky. “Such half-truths, which investors may have relied upon, obviously raise serious questions about the completeness of AIG’s characterizations of its financial condition.”

Milgram requests a meeting with Barofsky to “discuss ways state regulators can assist in assuring that its investors’ interests are addressed while avoiding regulatory duplication that might drain federal taxpayer dollars,” according to the letter.

“Such state-federal collaboration is especially important here, given that the American taxpayer owns most of AIG,” she wrote.

Milgram said the states wanted to ensure the investing public that money received by AIG was used to improve the financial welfare of the company, “not pad the pockets of the same individuals who led to the financial crisis in the first place.”

“We want to collaborate with the TARP Inspector General to ensure as much of this money is returned to the federal government as possible,” she said.