DOW JONES NEWSWIRES
New York Governor David Paterson said Eric Dinallo would resign
as New York state insurance superintendent July 3, confirming
speculation earlier Thursday he would leave the post.
Dinallo's resignation comes after the Republican Party called
for an investigation into a $100,000 donation to the state
Democratic Party from American International Group Inc. (AIG) days
before officials there initiated the bailout of the insurance
giant.
Records show the donation occurred Aug. 29. Dinallo said he
started negotiating with AIG and federal officials days later, but
the governor hadn't been informed.
On Sept. 16, the state announced it had helped the insurer
strike a deal with the Federal Reserve to keep it afloat. AIG's
bailout came under heavy scrutiny after employees received
performance bonuses and retention payments, and some government
officials questioned the secrecy of the government's rescue.
Paterson said Dinallo played "an integral part in the reform of
workers' compensation system and facilitated more than $15 billion
in new capital for the bond insurance industry."
Dinallo will take a teaching position at New York University's
Stern School of Business. There has been speculation Dinallo may
run for attorney general of New York if current Attorney General
Andrew Cuomo sought another post.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com