American International Group Inc.'s financial products unit remained in the spotlight last week, with reports that New York Attorney General Andrew Cuomo issued subpoenas concerning its credit default swaps.

Mr. Cuomo also has been an outspoken critic of $165 million in bonuses paid March 15 to employees of the unit. ``My office's investigation of AIG is continuing and we are proceeding with our security assessment for the employees'' he said in a statement last week. ``Through that process, my office has been working with AIG and its employees in an attempt to assess the status of the $165 million.''

Mr. Cuomo said of the $165 million, 47% of the total, or about $80 million, went to U.S. residents. He also said 15 of the top 20 recipients had agreed to return their bonuses, which totaled about $50 million.

In an e-mail, an AIG spokesman said, ``We are not commenting on Cuomo's subpoenas.'' A spokesman for Mr. Cuomo could not be reached for comment.

AIG had no comment on a report that an internal memo earlier this month appeared to advise employees of the unit that if enough bonus payments were returned, it was unlikely the recipients' names would be released publicly.

Meanwhile, Jake DeSantis, executive vp of AIG Financial Products Corp., submitted his resignation to AIG Chairman and Chief Executive Officer Edward Liddy in a letter that ran March 25 in the New York Times. He also said he planned to donate any after-tax proceeds of his $742,000 bonus ``to those suffering from the global economic downturn.''

Mr. DeSantis said only a handful of the financial unit's 400 employees were responsible for the unit's financial problems and the businesses he was associated with were profitable. He also said he had already agreed to work for an annual salary of $1.

``We have worked 12 long months under these contracts and now deserve to be paid as promised,'' Mr. DeSantis wrote. ``None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.''
Mr. DeSantis also criticized Mr. Liddy. He said until several hours before his appearance at a congressional hearing, at no time did Mr. Liddy ask for the retention contracts to be revised. ``It's now apparent that you either misunderstood the agreements that you had made…or were not strong enough to withstand the shifting political winds,'' Mr. DeSantis wrote.

In an e-mail response, AIG said: ``Ed deeply appreciates the frustration expressed in this letter and believes that the recent vilification and harassment of AIG employees is grossly unfair and unwarranted.''

On another front last week, the Connecticut General Assembly's Banks Committee held a hearing in which it said it learned from testimony by an AIG human resources vp and an attorney representing AIG that payouts also ``go to involuntarily terminated employees, or employees who resign with reason despite the fact that they fall outside the Connecticut Wage Act because those payments appear to be similar to severance payments.''

Meanwhile, in a 10-K report filed with the Securities and Exchange Commission last week, AIG's aircraft leasing unit, International Lease Finance Corp., reported that, ``We have been advised that AIG will continue to support our short-term liquidity needs through the earlier of our sale or March 2010.''

``Based on AIG's continued commitment to support us and management's plans'' which include potentially divesting ILFC, ``and after consideration of the risks and uncertainties of such plans, management believes we will have adequate liquidity to finance and operate our business and repay our obligations for at least the next 12 months,'' the filing said.