AIG has agreed to eliminate bonuses and salary increases for its top executives, state Attorney General Andrew Cuomo announced today. Cuomo said he is pleased with the development.

   “It is only fair that top executives, who benefit the most when firms do well, should also bear the burden of the difficult economic consequences their firms now face,” Cuomo said in a statement. “This gesture by AIG is appropriate and I encourage other firms to wake up to the new reality on Wall Street and follow AIG’s step quickly. The taxpayers of this country deserve nothing less.”

   AIG is grateful for the support it has received from American taxpayers and recognizes it needs to use that support to help the company recover and contribute to the economy, Edward Liddy, AIG chairman and CEO wrote in a letter to Cuomo. AIG’s top seven executives will not receive annual bonuses this year. Those executives and fewer than 55 senior partners will forego any salary increase through 2009 and their 2008 and 2009 bonuses will be restricted, Liddy said.

   AIG is developing a funding structure to ensure that no taxpayer dollars are used for annual bonus or future cash performance awards for the top 60 members of management. “We believe that these actions demonstrate AIG’s understanding of the depth of its obligation to the taxpayer and confirm its commtment to transparency of its disclosures,” he wrote.

   Sen. Ruben Diaz of the Bronx, one of the “Gang of Three” Democrats who have refrained from endorsing a majority leader in their party, may be warming to the idea, the Associated Press is reporting. Diaz has invited Senate Minority Leader Malcolm Smith, D-Queens, to his house for Thanksgiving dinner.

   But Senate Majority Leader Dean Skelos, R-Nassau County, also has been invited to the festivities, according to the AP. If the conservative Democrats backed Skelos, he could continue to be in charge of the Senate, even though there are more Democrats than Republicans.

   Smith has been the heir apparent to the majority leader post after Democrats won control of the Senate for the first time in more than 40 years, but several conservative Democratic senators have been holding back. Diaz has said he would not back Smith for majority leader unless he pledged not to bring a vote on gay marriage to the floor.

   Diaz and the two other senators, Carl Kruger of Brooklyn and Sen.-elect Pedro Espada of the Bronx, recently recommended that the state hold a referendum on gay marriage.

   Sen.-elect Hiram Monserrate of Queens originally was part of the group but pulled out a few weeks ago to back Smith.

   State Comptroller Thomas DiNapoli, a Democrat, is gearing up his campaign for 2010. He announced today that Gov. David Paterson is hosting “An Evening in Support of New York State Comptroller Thomas P. DiNapoli” at the storied Roosevelt Hotel on Madison Avenue. It is DiNapoli 2010’s first major fund-raising event in New York City and second major fund-raiser. Cocktails will cost between $500 and $1,500 (to write or raise), and the dinner is for those who contribute or raise $5,000 or more.

   This will be DiNapoli’s first election campaign. A former state Assemblyman from Long Island, he was named by his colleagues (and against the wishes of then-Gov. Eliot Spitzer) to replace disgraced Comptroller Alan Hevesi in 2007. Hevesi, also a Democrat, was re-elected in 2006, but he pleaded guilty to defrauding the government and resigned. He had used state employees to chauffeur his wife and help her with errands and chores.

   DiNapoli has hired the Benenson Strategy Group to conduct polling and research for his campaign. The group’s clients include now-President-elect Barack Obama, U.S. senators and representatives, international labor unions, Fortune 500 companies and others.

   DiNapoli had $312,054 in his campaign coffers as of October. His 32-day pre-general campaign-finance report said he had raised $351,269 that period and had spent $142,386. DiNapoli  said he has imposed a $10,000 per contributor per election limit on campaign contributions.

The Wall Street meltdown will cost New York 225,000 jobs and $6.5 billion in tax revenue, Comptroller Thomas Dinapoli estimated in a report to be released later today.

His assessment is the bleakest yet of the collapse of the state’s most important industry. Other observers have noted that what might make this downturn more serious than those in the last several decades is that it’s unclear the financial sector will snap back and climb to even greater heights, which has been the pattern since World War II.

In terms of tax revenues, the collapse is even more damaging to the state than to New York City, since the state depends more on income-tax revenue than the city does.

Gov. David Paterson is slated to spell out his plans to deal with the disaster when he presents his new budget plan to the Legislature on Dec. 16.

Here’s the story:

WASHINGTON — Hillary Rodham Clinton has decided to give up her Senate seat and accept the position of secretary of state, making her the public face around the world for the administration of the man who beat her for the Democratic presidential nomination, two confidants said Friday.

The apparent accord between perhaps the two leading figures in the Democratic Party climaxed a week-long drama that riveted the nation’s capital.

Mrs. Clinton came to her decision after additional discussion with President-elect Barack Obama about the nature of her role and his plans for foreign policy, said one of the confidants, who insisted on anonymity to discuss the situation.

Mr. Obama’s office told reporters on Thursday that the nomination is “on track” but this is the first word from the Clinton camp that she has decided.

“She’s ready,” the confidant said, addding that Mrs. Clinton was reassured after talking again with Mr. Obama because their first meeting in Chicago last week “was so general.” The purpose of the follow-up talk, he noted, was not to extract particular concessions but “just getting comfortable” with the idea of working together.

New Yorkers have just a week left to claim more than 19,000 economic-stimulus checks (with an average amount of $579) that were returned to the Internal Revenue Service because of incorrect addresses. Taxpayers have until next Friday to update their address. By law, stimulus checks must be sent out by Dec. 31.

Rep.-elect Eric Massa followed up with his own statement on his victory.

“First I want to thank the citizens of the Southern Tier, the Finger Lakes and all of Western New York, regardless of who they voted for. I also want to thank my family, my staff and the thousands of grassroots volunteers who helped ensure this victory. This was a close election and I’m honored and humbled to have been chosen as the area’s Representative in Congress.”

“There’s a lot of work to be done in Washington and in the district, and I will fight to deliver the change that my fellow New Yorkers have been waiting for.”

And Massa also put out a new official photo, above.

Massa’s statement said he also congratulated Congressman Randy Kuhl on his hard fought campaign and years of service and plans to work with Kuhl’s staff during the transition.

“To maintain the high level of constituent services that our citizens deserve, I look forward to working with Congressman Kuhl during this transition. I believe it is important that we work together in this time to continue serving the voters of this district.”

“Finally, I would like to thank Congressman Randy Kuhl who has served our region honorably for decades. His public service in the New York State Assembly, Senate and in Congress will always be appreciated.”

With recounts showing Democratic congressional candidate Eric Massa with a roughly 4,000 vote lead, Rep. Randy Kuhl, R-Hammondsport, Steuben County, did what was expected for more than a week: he conceded.

Massa was holding a news conference today to officially declare victory.

“I would like to congratulate my opponent on his victory. A few moments ago, I called Eric Massa to congratulate him on being elected to the 111th Congress,” Kuhl said in a statement.

“I would also like to sincerely thank everyone who has supported me over the last 28 years. From voting for me to volunteering for my campaign or putting a sign in their yards, words cannot express my appreciation for my supporters. I have been honored to represent them in Congress, the State Senate and State Assembly. This election’s outcome is no indication of the hard work and dedication that my supporters put forth.

“This race was a close and tough battle to the end, and today I urge all of my supporters to give Congressman-elect Eric Massa the support and encouragement that he will need to carry out the great tasks that he will face in the 111th Congress. This country is facing an uphill battle. Our economy faces historic and unprecedented challenges, and we must unite to find the solutions that our country needs.”

From the Buffalo News’ Bob McCarthy:

Citing a lack of people and resources, District Attorney Frank J. Clark says he will not probe allegations of election law violations lodged by the Erie County Board of Elections against Buffalo Sabres owner B. Thomas Golisano.

Clark emphasized he has not judged the merits of complaints brought by Republican Elections Commissioner Ralph M. Mohr and his Democratic counterpart, Dennis E. Ward. But he also said his experience in investigating a pending election law case involving former West Seneca Supervisor Paul T. Clark has convinced him that his office must pass on the case in view of the extensive investigation involved.

“We are not equipped to handle something like this,” Clark said. “I would have to have a staff of accountants, and I simply don’t have the resources to do it.”

Clark, who will retire Dec. 31, said the request for an investigation could still be handled by his successor, Frank A. Sedita III, should the incoming district attorney choose to pursue the case.

Sen. George Maziarz crossed party lines today and urged Governor Paterson to pick Buffalo Mayor Byron Brown, a Democrat, to succeed Sen. Hillary Rodham Clinton if she leaves to take a job in the Obama administration.

Maziarz said it would be important for upstate New York to have a statewide representation who understands upstate’s plight.

“I’m tired of every statewide elected official talking about upstate and never really stepping up to the plate and doing something for upstate,” said Maziarz, R-Newfane, Niagara County, whose district runs into Rochester.

Maziarz said he hadn’t discussed his endorsement with Brown, but simply said he wanted to urge Paterson to look upstate were Clinton to leave. Brown served with Paterson, also a Democrat, and Maziarz in the Senate before being elected as Buffalo mayor.

Maziarz said it would be good for Paterson heading into his re-election bid in 2010 if he chooses someone from upstate.

“Do you we really need another statewide official from New York City?” Maziarz said.

Asked why he picked Brown instead of Rep. Brian Higgins, D-Buffalo, who is the more talked about upstate replacement, Maziarz said he said Brown has the executive experience as mayor that makes him an attractive candidate.