AIG Said to Skirt Campaign Law
    The Associated Press

    Tuesday 19 September 2006

    Albany, New York - Despite state laws that limit corporations from giving more than $5,000 a year to political candidates, insurance giant American International Group Inc. has used a loophole to let its subsidiaries give many times that limit to politicians who regulate their business, a newspaper reported Tuesday.

    AIG used 33 subsidiaries in recent years to give $335,000 to three-term Republican Gov. George Pataki; $50,000 to state Attorney General Eliot Spitzer, the Democratic front-runner for governor; and $25,000 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."

    A spokesman for the state Board of Elections, Lee Daghlian, said his office is not looking into the contributions.

    "As far as I can see, it's within the parameters of our law," Daghlian said.

    The corporate limits were created in the mid-1970s to restrict the influence of companies on candidates, he said.

    AIG spokesman Joe Norton didn't immediately respond to a request for comment Tuesday. 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 decides which candidates will 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 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 corporate limit, but instead are treated as individuals and may contribute as much as $50,100 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.