The attorney general’s office worked through the weekend to get back into the fray. In phone calls with company lawyers, Lawsky demanded the names of AIG bonus recipients. “On Monday we’re calling AIG saying, ‘Where’s the list?’ ” he says. “Lists don’t take long; they have all this on a spreadsheet, they know who they’re paying.” So Cuomo turned up the heat, publicly releasing a toughly worded letter to Liddy and issuing subpoenas. Obama, finding himself playing catch-up, demanded that the Treasury Department move to seize the bonuses.
Near midnight, AIG e-mailed a list—one that itemized the bonuses by size, but with no names attached. Cuomo put the information to good use. “Barney Frank is getting ready to have a hearing,” Lawsky says. “So we crank out a letter on Tuesday that lays out some of this new information: The top guy got $6.4 million, the next four guys got $4.6, all the way down. And then he has his hearing, and after that is when it gets very hot.”
On Wednesday, Cuomo’s campaign got a weighty boost: A State Supreme Court judge ordered Bank of America to surrender the identities of its bonus recipients. AIG knew that it would be next.
But as the House was passing an overreaching bill that would tax bailout bonuses at 90 percent, Cuomo was quietly showing how much he’d learned, that now he knew when to change course and ease up. On Friday, AIG’s chief operating officer, Gerry Pasciucco, sent out an e-mail setting a 5 p.m. Monday deadline for staffers to say whether they planned to return their retention payments. Implicit in the message was something of a Cuomo ultimatum. “We have received assurances from Attorney General Cuomo that no names will be released by his office before he completes a security review,” Pasciucco wrote. “To the extent that we meet certain participation targets, it is not expected that the names would be released at all.” On Monday, Cuomo announced he’d persuaded nine of AIG’s top ten bonus recipients to give back their cash. All told, he recovered $50 million.
“Cuomo is pursuing the course the majority of voters want him to pursue, which is to recover bonuses. Are there brass knuckles being used? Yes.”
Lawsky insists that Cuomo wanted the names only to buttress his legal case. “We want to go one by one and say, ‘Okay, Person Z, you gave them $1 million. What possible basis was there? What are they doing that’s so important?’ And for that you need the names of individuals,” he says. “The list was simply so we could do a fraudulent-conveyance investigation. That got lost in the furor that ensued.”
The argument is a bit disingenuous. Cuomo could have evaluated the job performances of financial executives while keeping their names private, but he wouldn’t have scored as many public points if he’d made that promise from the beginning. “Cuomo is probably pursuing the course that the vast majority of New York State citizen voters want him to pursue, which is to try to recover bonuses,” Coffee says. “Are there brass knuckles being used? Yes.”
Though Cuomo’s pursuit of bailout bonuses has been widely popular, some analysts worry about unintended consequences of the larger assault on executive pay. “We could end up with the worst of all combinations,” says Raghuram G. Rajan, a University of Chicago finance professor, where firms that don’t touch taxpayer money are “unrestricted and unrestrained, and attract the best people,” while those that do accept bailout funds are “better able to do business because of the government backing and the low cost of capital—yet have less-capable executives managing those greater resources.” Lawsky says Cuomo is consulting with Congress about exactly those issues, because “a lot of that is big-picture Washington reforms.” Or maybe even something a governor could tackle.
In his sparse public utterances, Cuomo says that he’s busy and happy in the job he has now. But friends just laugh when they hear it. “I don’t care what anyone tells you, including him: He’s bored with what he’s doing. The challenges are just not up to his appetites,” says one pal. “What Andrew likes about this AIG thing is that it gets press and he’s beating up on the big guys. But being the warm-up band for the big act just drives him crazy.”
Despite his protestations, Cuomo certainly seems to be lining up the pieces for a gubernatorial run. An inveterate political animal, he regularly solicits advice from strategists. “Every time he sees me, he says, ‘Am I doing what I’m supposed to be doing?’ ” George Arzt says. “I don’t know and wouldn’t tell him which companies to go after. [But] we go over some of the things he needs to be doing: Who he should be reaching out to, what group he needs to go before, what issues might be good to get into.”