(CNN) -- Twenty state attorneys general announced investigations Friday into the $165 million bonuses paid by insurance giant AIG last week, with Connecticut's top lawyer issuing subpoenas to CEO Edward Liddy and 11 other executives.
AIG chief Edward Liddy has asked some employees to give back their bonuses.
Connecticut Attorney General Richard Blumenthal and the Democratic chairman of the General Assembly's Banks Committee want Liddy and other executives to appear Thursday and bring with them "original or copies of documents regarding the AIG Financial Products Corp. retention bonus plan and any related contracts or agreements."
"Now living off supersized taxpayer-paid bonuses, these AIG employees have a moral and legal obligation to appear at this legislative hearing and disclose details about corporate compensation to employees as well as investment decisions by AIG Financial Products Corp. involving credit derivatives and dealings that have led to market destruction," said Blumenthal, a Democrat.
AIG officials are citing a Connecticut law to justify their payment of the bonuses. The law says that employees can sue in civil court for payments withheld that are due them and recoup double the amount of money. Many AIG employees live in Connecticut.
New York Attorney General Andrew Cuomo is already investigating AIG's bonus payments, and on Thursday received a list of employees who received bonuses that he had demanded a day earlier.
It was not clear where Blumenthal got the list of executives he subpoenaed. At least one of them, Doug Poling, is know to have received a retention bonus. Earlier Friday, Poling, a senior executive, announced through a company spokesman that he would be returning the $6 million he received.
The attorneys general of Arizona, Delaware, Illinois, Kentucky, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Washington and West Virginia have also launched investigations. New Jersey Attorney General Anne Milgram said all 19 state attorneys signed a letter to Liddy demanding names and documents concerning the bonuses.
"We are investigating whether this compensation was paid to those working in the AIG subsidiary largely responsible for the financial crisis at the company," Milgram said. "This crisis, in turn, resulted in the loss of billions of dollars in shareholder equity and necessitated a huge influx of taxpayer money."
Meanwhile, Sen. Chris Dodd, Connecticut's Democratic senior senator, said Treasury Department officials misled him on the issue of bonuses for AIG executives. He said he would not have drafted key legislative changes allowing the bonuses to move forward if he knew the purpose of those changes.
Dodd, who was visiting constituents in Enfield, Connecticut, said he was disappointed that the Treasury officials who asked him to make the legislative changes had not identified themselves.
People are "incensed" about the "infuriating" bonuses to officials at AIG and elsewhere, Dodd said, and "I don't blame them."
Dodd told CNN on Wednesday that he was responsible for language added to the stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored. A Treasury Department official told CNN earlier that the Obama administration had pushed for the language.
Dodd had initially denied he had anything to do with adding the provision.
Treasury Secretary Timothy Geithner told CNN's Ali Velshi Thursday that his department had asked Dodd to make the changes.
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