Conn. consumer chief: No jurisdiction on AIG bonuses

NEW YORK (Reuters) - Connecticut Consumer Protection Commissioner Jerry Farrell said on Thursday he has no jurisdiction under state law over $165 million in bonuses that American International Group paid its employees.

An analysis of contract documents provided under subpoena yielded no subject matter jurisdiction, Farrell said in a statement.

The state's unfair trade practice law is meant to help consumers with problems they have with businesses, and does not apply to taxpayers, he said.

"While we might like to look at 'the taxpayers' who are ultimately funding the AIG bonuses, and be tempted to say that they, too, are consumers -- the group of people that CUPTA (Connecticut Unfair Trade Practices Act) was meant to protect -- that would be stretching the law beyond its original intent and logical reading," he said.

AIG caused a national furor by paying bonuses to staff for the year 2008 after receiving billions of dollars in taxpayer bailout money from the U.S. Treasury and Federal Reserve.

The company's financial products arm, which was mainly responsible for AIG's distress, is based in Wilton, Connecticut. State Governor Jodi Rell had instructed the consumer protection department to determine if the bonuses had violated state law because they were against public policy.

New Jersey is separately leading a group of 19 states that are probing AIG's bonuses.

New York Attorney General Andrew Cuomo has been working with congressional leaders to try to get AIG executives to give back the bonuses.

(Reporting by Ciara Linnane; Editing by Jan Paschal)