New York Secretary of State Andrew Cuomo is going after the big banks that originally signed on - although not all were initially willing - to the Treasury Departments plan to infuse funds into financial institutions in return for preferred stock and common stock warrants.  The subject?  Executive compensation.

On Wednesday Cuomo sent a letter to nine banks including Bank of America, Bank of New York Mellon, Citigroup, State Street Bank, and Wells Fargo requesting "a detailed accounting regarding your expected payments to top management in the upcoming bonus season."  The letter says that the Office of the Attorney General is particularly interested in the expected bonus pool at each bank for the year and wants the figures both before and after they signed to receive taxpayer funds under the Troubled Asset Relief Program (TARP).  "Obviously," Cuomo said, "we will have grave concerns if your expected bonus pool has increased in any way as a result of your receipt or expected receipt of taxpayer funds from TARP."

Year-end bonuses at big Wall Street firms are a major part of the annual compensation of middle and upper-level management.  According to The New York Times, the Comptroller of the State of New York estimated that bonuses in 2007 totaled $33.2 billion and $33.9 billion the year before.

Cuomo's letter goes on to request the following information, to be received by November 5:

• A description of all bonus pools expected this year and a description of the process by which they were established.

• A description of the process under which the pools will be allocated and distributed.

• A description, if relevant, as to how calculations and allocation plans for the pools may have changed as a result of the TARP funds.

• A description for each of the previous two years of the bonuses awarded to employees receiving more than $250,000 in compensation.

The Attorney General said that, in this new era of corporate responsibility, boards of directors must "step up to the plate and prevent wasteful expenditures of corporate funds on outsized executive bonuses and other unjustified compensation."   He then asked that the requested information be provided by the various boards of directors saying that each firm's executives "has a significant interest in the size of the bonus pools."

Cuomo, who is also investigating insurance giant American Insurance Group (AIG) quoted from a letter recently sent to that firm.  "Now that the American taxpayer has provided substantial funds to your firm, the preservation of those funds is a vital obligation of your company.  Taxpayers are, in many ways, now like shareholders of your company, and your firm has a responsibility to them."

The Times reported that Cuomo reached an agreement with AIG last week that it would freeze millions in payments to former executives.

Cuomo's letter was also sent to Goldman Sachs, Merrill Lynch, J. P. Morgan Chase, and Morgan Stanley.

Also according to The Times, Congressman Henry Waxman (CA-D), Chairman of the House Committee on Oversight and Government Reform, sent letter similar to Cuomo's to banks this week.  Waxman's letter urged banks not to use any government money for bonuses or other payments and asking for pay data for 2006 and 2007.

And speaking of AIG, several sources are reporting that the insurance conglomerate has nearly run though the money the government injected into it a few short weeks ago.

Gavin Magor writing for TheStreet.com (Jim Cramer's web site) last week claimed that AIG "continues to bleed cash and is running out of time to sell off assets as vultures are waiting in the wings."

AIG had, up to the previous week, run through $72.3 billion of the $85 billion the feds had offered as a bailout and had also used $18 billion of the Federal Reserve Bank of New York's $37.8 billion securities lending facility. 

Magor figured that the firm had about eight weeks left to live off of the federal largesse.  However, a huge British firm, Prudential PLC, is biding its time waiting to pick the bones; much like Barclays recently did when it pulled out of negotiations to buy Lehman Brothers, watched it fail, and then stepped forward to buy up bits and pieces of the firm at cut-rate prices.

Mary Williams Walsh, writing in the NYT, cites similar figures on AIG's burn rate but goes on to ask "Where did the money go?" 

Well we all know that about one-half million went to finance a perk for top executives - a luxury vacation at a plush spa.  But that is pocket change.  Ms. Walsh quotes analysts who speculate that the company had already