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Marketplace Scratch Pad

AIG wants money back from charities

Scott Jagow Jun 4, 2009

I really wouldn’t mind if AIG spent a little money on the PR department. This week, we learned that AIG is going to court to try to seize money from a charitable foundation in order to pay bonuses and keep talent. Now, before you have a conniption, let me explain, and you can decide for yourself.

In the 1970’s, CEO Hank Greenberg and some of his co-founders set up an offshore piggy bank and seeded it with their own shares to build up a nest egg for retiring executives at AIG. But when Greenberg left in 2005, most of that money was transferred to the Starr International Foundation, which has passed it along to charities.

Starr contributes to a wide range of organizations, which you can read about here. They include Marketplace, which has gotten financial support from Starr for Marketplace’s coverage of Asia.

AIG is claiming that since the Foundation’s money was originally designed for employees, the company needs it back… and I quote – to “attract and retain top employees.”

In fact, AIG also wants permission to go after money that has already been donated to charities through this foundation. Just last week, for example, the Foundation gave half a million dollars to support a new health care clinic in the Bronx. It’s for homeless children and families.

They couldn’t possibly, could they?

Well, legal experts tell the New York Post that if AIG wins this federal case, which goes to court in a couple weeks, then, yes, they could sue to claw back money already given to charities.

Congressman Brad Sherman (D-California) says if AIG does win, the money ought to go to taxpayers first, not bonuses.

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