Eleven U.S. states on Friday called for a deeper probe into the $165 million of bonuses that American International Group Inc awarded employees in a unit whose losses led to a federal bailout of the insurer.

In a letter to Neil Barofsky, the special inspector general of the Troubled Asset Relief Program, the attorneys general of the 11 states expressed concern about how much taxpayer money is going toward compensation.

They pointed to AIG having said in May that it paid $454 million of bonuses companywide, nearly four times the amount Congress had been told two months earlier.

AIG claims the discrepancy is explained by Congress's failure to pose the March compensation question with sufficient precision, New Jersey Attorney General Anne Milgram wrote in the letter. Such half-truths, which investors may have relied upon, obviously raise serious questions about the completeness of AIG's characterization of its financial condition.

Milgram asked for a meeting with Barofsky to discuss how regulators can better work to protect investors' interests. Arizona, Delaware, Illinois, Kentucky, Maine, Michigan, Mississippi, New Mexico, Ohio and Texas joined the request.

The bonuses were awarded in AIG's financial products unit, where losses tied to credit default swaps led to a $99.3 billion loss for AIG in 2008. A series of bailouts totaling $180 billion left the government owning an 80 percent stake in what was once the world's largest insurer by market value.

Barofsky was not immediately available for comment.

(Reporting by Jonathan Stempel; editing by John Wallace)

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