AIG Political Contributions by Subsidiaries Questioned
in N.Y.

http://www.insurancejournal.com/news/east/2006/09/21/72628.htm
September 21, 2006

Major corporations based in New York such as American
International Group Inc. have legally contributed many
times more than the corporate limit to political
candidates who regulate their businesses, state and
good-government officials said.

In the case of AIG, the insurance giant is limited to
giving $5,000 (euro3,951) to a candidate. But the
parent company used 33 subsidiaries in recent years to
give $335,000 (euro264,738) to three-term Republican
Gov. George Pataki; $50,000 (euro39,513) to Attorney
General ELIOT SPITZER, the Democratic front-runner for
governor; and $25,000 (euro19,757) 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.''

"As far as I can see, it's within the parameters of
our law,'' said Lee Daghlian, a spokesman for the
state Board of Elections, of the AIG contributions.
"We are not looking at anything.''

The corporate limits were created in the mid-1970s and
set at $5,000 (euro3,951) to restrict the influence of
companies on candidates, he said.

AIG spokesman Joe 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 recommends the candidates to 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 (euro1.3 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 (euro3,951)
corporate limit, but instead are treated as
individuals and may contribute as much as $50,100
(euro39,592) 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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