CHARLESTON – A Charleston attorney says the current controversy over AIG executives getting bonuses using federal bailout money to the tune of $165 million is not just an insult to taxpayers nationwide, but to the state's teachers.
On behalf of a class of state teachers and school service personnel, Harry Bell filed a lawsuit last year against former state lawmaker Ramona Cerra, AIG and its subsidiaries and the state Consolidated Public Retirement Board.
The lawsuit blames Cerra for persuading teachers to leave a defined benefit pension program for a 401K-style retirement plan administered by AIG.
Teachers recently voted to switch back to the old program because the AIG plans were underperforming.
"Over 14,000 teachers and school service personnel in West Virginia are deeply interested in the debacle that is their retirement accounts," Bell said in a statement. "Their individual financial well-being was and continues to be placed at risk due to highly-leveraged, high-risk credit default swaps of collateralized debt obligations by AIG.
"That is bad enough, but the recent bonus payments show a total disconnect from reality on the part of AIG."
Bell said the bonus payments are "reprehensible." He said the money could have been used to pay back the teachers involved in his lawsuit.
"Instead of offering to make good on promises to ensure the retirement future of West Virginia teachers and school service personnel ... AIG has chosen to handsomely award its own personnel for what the entire country knows is a 'job undone,'" Bell said.
The case is currently pending in Kanawha Circuit Court assigned to Judge Tod Kaufman. Bell indicated he plans to use the bonus payments in arguments before a jury.
"West Virginia teachers get ripped off, AIG gets paid fees by the state for providing a defense on behalf of the state Auditor and the retirement board, and it also pays thousands of dollars to defend itself," Bell said.
"I cannot wait to see this case heard by a jury and have AIG executives from Wall Street come to West Virginia to try to defend their actions."