AIG Controversy Enters N.Y. Campaign

By Keith B. Richburg
Washington Post Staff Writer
Tuesday, March 17, 2009; 6:46 PM

NEW YORK, March 17 -- Those controversial bonus payments to executives at insurance giant AIG today became a new issue in the increasingly heated special election for a vacant House seat in upstate New York.

Tuesday, the Republican candidate, Jim Tedisco, who is the minority leader in the state assembly, issued a press release saying his Democratic opponent, businessman Scott Murphy, "endorses AIG bonuses." Tedisco's logic: the AIG bonuses were specifically protected in language in the recently passed federal stimulus package.

Murphy has said he would have voted for the stimulus bill, which would benefit projects in upstate New York, and he has been hammering Tedisco for weeks for refusing to take a position. Monday, Tedisco did take a stand, saying he would have opposed it, like all the other House Republicans.

"Scott Murphy didn't read the stimulus bill," Tedisco said Monday in an e-mailed statement. "Nobody in Congress did. Yet Scott Murphy supported the legislation, including provisions allowing AIG to hand out $165 million in bonuses to executives."

The Murphy campaign fired immediately back. Spokesman Ryan Rudominer accused Tedisco of "making false and deceptive attacks and playing desperate games with voters on the economy." He said, "Murphy is on the side of stricter compensation limits and Tedisco is against."

Murphy, in a statement from his headquarters in Glens Falls, today called for legislation to cap the pay of executives taking taxpayer money, and he called the AIG bonuses "reprehensible."

Murphy came out in early February and said he supported President Obama's plan to cap executive compensation at $500,000 at companies receiving federal bailout money. But that cap was not retroactive.

Campaigning for the March 31 special election -- to fill the seat vacated by Democrat Kirsten Gillibrand, who was appointed to the Senate seat that had been held by Secretary of State Hillary Rodham Clinton -- has turned increasingly nasty, as Democrats try to hold on to a seat in a traditionally conservative, gun-loving Republican area, and Republicans see a chance for a comeback.

Tedisco, well known in the area from his 20 years in the overlapping state assembly district, has been considered the front-runner. But Murphy and the Democratic Congressional Campaign Committee have been saturating the area with television ads, and some recent surveys suggest the race may be tightening.

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