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New York Attorney General Andrew Cuomo is demanding information about executive compensation and bonuses at nine banks that have received federal funds under TARP, the U.S. Treasury's Troubled Asset Relief Program.
In a letter to each institution's Board of Directors, Cuomo warns the bonuses could violate New York's state fraudulent conveyance law.
"Obviously," he writes, "we will have grave concerns if your expected bonus pool has increased in any way as a result of your receipt or expected receipt of taxpayer funds from TARP."
In the letter, Cuomo demands information on how this year's bonus pools were calculated, as well as details on each bank's 2006 and 2007 bonus payments.
Cuomo recently won concessions from AIG [AIG
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]—also the recipient of a federal bailout—after details of lavish payments and corporate junkets came to light.
The firms receiving today's letter are: Bank of America [BAC
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], Bank of New York Mellon [BK
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], Citigroup [C
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], Goldman Sachs [GS
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], J.P. Morgan Chase [JPM
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], Merrill Lynch [MER
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], Morgan Stanley [MS
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], State Street [STT
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] and Wells Fargo [WFC
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].
In a statement, Citigroup said it would cooperate with federal and state inquiries about its wages and benefits, which the firm says "reflect compensation best practices." The company also noted that the federal bailout already includes restrictions on executive pay.
A spokeswoman for State Street said the bank is "carefully evaluating the request," and a Goldman Sachs spokesman said the firm had not yet seen the letter.
Spokespeople for Bank of America, Bank of New York Mellon, J.P.Morgan Chase, Merrill Lynch and Wells Fargo all declined to comment. Morgan Stanley could not be immediately reached for comment.
Yesterday, California Congressman Henry Waxman, who chairs the House Oversight and Government Reform Committee, sent similar letters to the same nine banks.
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