AIG Gets a Bailout

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June 2009
- AIG Comes Out Swinging in $4.3B Lawsuit vs. Ex-CEO
  
  Associated Press | Jun 15, 09 5:04 PM CDT
  
  (Newser) - AIG 's longtime CEO sold crucial assets in 2005 out of spite, the company's lawyers charged as they opened their civil suit against the ousted exec today in New York. “Hank Greenberg was mad. He was angry,” said a lawyer for the bailed-out mega-insurer. Greenberg was weeks away from being ousted as CEO when he authorized the sale of shares from a trust fund meant to provide for AIG execs. More »
- AIG Dodges Insurance Claims from Hudson Flight
  
  New York Times | Jun 12, 09 1:22 AM CDT
  
  (Newser) - Passengers from US Airways Flight 1549 are having a tough time getting its insurer, AIG, to cough up for claims, the New York Times reports. Aviation liability insurance requires a finding of negligence. But Capt. Chesley Sullenberger and his crew were universally acknowledged to have performed amazingly well in saving all passengers, and the insurer is using that to dodge payments to those who suffered losses or injuries. More »
May 2009
- Liddy to Leave AIG
  
  Wall Street Journal | May 21, 09 4:28 PM CDT
  
  (Newser) - AIG chief Edward Liddy is stepping down after eight months on the job, the Wall Street Journal reports. The government appointed Liddy chairman and CEO last fall after the feds bailed out the insurance giant. Liddy recommended splitting the job into two roles and will remain until his replacements are chosen. AIG's problems occurred well before Liddy's watch, but he took plenty of heat over AIG bonuses this year. More »
- Fed Knew of AIG Bonuses 5 Months Before Storm
  
  Washington Post | May 13, 09 7:01 AM CDT
  
  (Newser) - Senior officials at the New York Federal Reserve knew about AIG's plans to pay large bonuses more than 5 months before controversy erupted, according to documents seen by the Washington Post . Correspondence and phone records show that the central bank was working with AIG, lawyers, auditors, and PR firms to prepare for a firestorm of opposition, but they did not alert the Obama administration until late February. More »
- AIG's 2008 Bonus Pool Rises to $454M
  
  Politico | May 5, 09 6:04 PM CDT
  
  (Newser) - Lawmakers and journalists keep pressing AIG about how much it paid out in bonuses in 2008, and the number keeps getting bigger, reports Politico. In response to a query from Rep. Elijah Cummings, the company now says it paid $454 million, about 4 times the figure it told Politico in March. The figure does not include $165 million in controversial retention payments to employees of a unit that caused AIG much of its financial grief. More »
April 2009
- Robber Told Bank He Was Fed Up With Bailouts
  
  San Francisco Chronicle | Apr 22, 09 3:20 PM CDT
  
  (Newser) - Police are looking for a man who robbed a San Francisco branch of Bank of America—ostensibly out of disgust for corporate bailouts, the Chronicle reports. The man requested a meeting with a manager and told him he represented “a corporation” concerned with the bailouts—before threatening to detonate a bomb he claimed to have in a briefcase. The robber told bank personnel the large amount of cash “would go to people who deserve it.” More »
- Taxpayers Must Become Activist Investors: Icahn
  
  Huffington Post | Apr 16, 09 11:05 AM CDT
  
  (Newser) - Barney Frank was right when he said a retention bonus is “a nice word, it turns out, for extortion,” writes Carl Icahn for the Huffington Post. “Very few managers are irreplaceable, especially in this economy”—so why do they get paid extra to stay with a company they've run into the ground? “In many cases, the companies are better off without them,” Icahn contends. More »
- Goldman Back on Top, Thanks to Uncle Sam
  
  New York Times | Apr 15, 09 8:15 AM CDT
  
  (Newser) - Goldman Sachs reported a $1.8 billion profit yesterday, and it owes it all to its helpful Uncle Sam, writes William Cohan in the New York Times. “Government Sachs,” as it’s come to be known, has been pulling Washington’s strings for years, and now its competitors are all dead or in ruins—thanks largely to former CEO Hank Paulson, who played a key role in the fall of Bear Sterns and Lehman Brothers, and the Merrill Lynch buyout. More »
- Kids to AIG: 'Not All of USA Hates You'
  
  Washington Post | Apr 13, 09 3:44 PM CDT
  
  (Newser) - It seems fourth-graders have a greater store of empathy than the rest of this crisis-wracked nation. When a Houston teacher asked students how they felt about the AIG bonus scandal, it provoked the usual boos and hisses. But when she put the kids in an AIG employee’s shoes, they relented and wrote letters of support to beleaguered workers. The Washington Post takes a look at the result. More »
- AIG Bailout Has Failed: Greenberg
  
  Wall Street Journal | Apr 2, 09 12:39 PM CDT
  
  (Newser) - AIG’s former CEO told Congress today the bailout of the insurance firm has “failed” and that the government should restructure the company, the Wall Street Journal reports. At a House committee hearing, Hank Greenberg said he blamed his successors for the firm’s implosion: "I think they got greedy. I think they wrote considerably more business than they should have." More »
- AIG Gaffe Puts Dodd 16% Behind GOP Challenger: Poll
  
  Hartford Courant (Conn.) | Apr 2, 09 12:11 PM CDT
  
  (Newser) - The AIG bonus scandal has battered Connecticut Democrat Chris Dodd’s Senate reelection chances, the Hartford Courant reports. A new poll shows the five-term incumbent trailing GOP challenger Rob Simmons by 16%, a deficit one analyst calls “staggering.” Overall, Dodd’s approval is at 33%. And since AIG, “his approval rating among Democrats is down to 51%,” the pollster said. More »
- Former AIG Chief Greenberg to Testify Today
  
  Wall Street Journal | Apr 2, 09 8:06 AM CDT
  
  (Newser) - Former AIG chief Maurice “Hank” Greenberg will go before a House committee on Capitol Hill today, testifying about the world-wide conglomerate that is now the most infamous culprit of the financial crisis, despite efforts by both the GOP and current AIG management to undercut his credibility. Greenberg is expected to recommend trimming the government’s stake and pressuring trading partners to funnel their own bailouts into AIG as an investment, the Wall Street Journal reports. More »
March 2009
- Obama Fully Invested as CEO-in-Chief
  
  Politico | Mar 31, 09 9:16 AM CDT
  
  (Newser) - Though he entered office with relatively little business experience, the past week has seen President Obama assume the role as “the most powerful player in American business today,” Mike Allen and Jim VandeHei write for Politico. “He’s realizing, ‘Hey, the economy’s mine now, and I better do it my way,’” a source says. “So the administration is collaring people and letting them know who’s in charge.” More »
- AIG's Woes Point to Larger Insurance Crisis
  
  Los Angeles Times | Mar 30, 09 9:13 AM CDT
  
  (Newser) - AIG’s troubles were quickly blamed on a single, obscure wing of the company, but its problems extend to its core life-insurance division—underscoring dangerous weaknesses across the entire industry and pointing to the possibility of a second financial crisis, the Los Angeles Times reports. What's more, by offering AIG a federal lifeline, the behemoth at the eye of the storm may have an unfair competitive advantage over smaller rivals. More »
- AIG Honchos Quit Paris Office, Spurring Fears of Default
  
  Wall Street Journal | Mar 26, 09 7:08 AM CDT
  
  (Newser) - Two of the top managers at AIG's Paris unit have resigned, reports the Wall Street Journal , leaving the insurer scrambling to avoid potential defaults on $234 billion in derivative transactions. The complicated scenario results from a French law that says regulators must approve of the managers' replacements or else pick their own—which would constitute a "change in control" at AIG that could trigger the defaults. More »
- AIG Bonus Recipients in Europe Cry Blackmail
  
  Reuters | Mar 25, 09 7:21 PM CDT
  
  (Newser) - Some AIG executives in Europe think the demands that they return their bonuses are tantamount to "blackmail," Reuters reports. In fact, a compliance officer for Banque AIG unit in London asked UK authorities to determine whether the demands for repayment constitute extortion. He encouraged others in an email to hold off repaying until they got an answer. An AIG spokesman said that concern "was not shared by the company." More »
- AIG Employee Tells Liddy: You Betrayed Us
  
  New York Times | Mar 25, 09 9:27 AM CDT
  
  (Newser) - Though he says he’s blameless for the mess that brought down AIG, and worked 14-hour days at $1 a year to help dismantle the insurer, executive Jake DeSantis feels “betrayed” by CEO Edward Liddy—and lets him know in a resignation letter published by the New York Times . He rips elected officials for “persecution,” and Liddy for not standing up to them, particularly over bonuses. More »
- Geithner Asks Congress for Broad Takeover Powers
  
  Reuters | Mar 24, 09 10:37 AM CDT
  
  (Newser) - Timothy Geithner today asked Congress for expanded power to take the helm of big, failing institutions like AIG and wind them down in an orderly fashion, Reuters reports. “AIG highlights broad failures of our financial system," Geithner said in unusually spirited testimony before the House Financial Services Committee. "We must ensure that our country never faces this situation again.” Geithner and Ben Bernanke were called before fire-breathing lawmakers to testify about AIG’s recent bonus payout. More »
- IRS Challenges AIG's Offshore Tax Deals
  
  Wall Street Journal | Mar 24, 09 8:07 AM CDT
  
  (Newser) - The IRS is challenging a series of tax-skirting deals engineered by the much-maligned AIG Financial Products unit, the Wall Street Journal reports. The deals exploited differences in international tax codes to reduce tax payments for foreign banks—many of the same banks the US government would later pay to settle contracts with the insurer. At its height, the business was even larger than AIG’s credit-default-swap trade. More »
- AIG Bonus Tax Is Stalled, Likely to Die in Senate
  
  Bloomberg | Mar 24, 09 7:33 AM CDT
  
  (Newser) - With populist outrage cooling and the White House even cooler, the 90% AIG bonus tax that sailed through the House last week is stalled in the Senate, where it's likely to die, reports Bloomberg. Majority Leader Harry Reid said yesterday this week will be devoted to debating national service and the budget—with Congress taking spring break in just two weeks, that pushes the tax bill into late April. More »