Disability Law

AIG Weekend Update

By Patrick Hindert

It has been a rough week for American International Group (AIG).

Former AIG CEO's Martin J. Sullivan and Robert B. Willumstad faced harsh criticism when they testified on Tuesday before Congress. Legislators focused most of their questions on AIG's investments in complicated investment products that insured mortgaged backed securities. They called Sullivan "despicable" for refusing to forego his multi-million dollar severance bonus and further criticized him for reasuring AIG investors in December 2007 about AIG's financial strength despite internal warnings from AIG auditors. Although invited to participate, former AIG CEO Maurice "Hank" Greenberg was a "no show". Instead, in a written statement to Congress, Greenberg said AIG's downfall was not his fault.

The most extreme Congressional, media and public outrage toward AIG this week, however, attacked the well-documented AIG sales retreat in California that occurred less than a week following the U.S. government's $85 billion bailout. AIG Chairman Edward M. Liddy responded to criticism of the AIG's sales retreat with a letter to Treasury Secretary Henry Paulson stating in part: "we owe our employees and the American public new standards and approaches." Absolutely!

And all of this happened before Wednesday when the Federal Reserve announced it had increased its loan to AIG by $37.8 billion (total: $122.8 billion) to help AIG subsidiaries (including insurance subsidiaries) cover requests from clients to redeem borrowed securities. As the late Senator Everett Dirkson once said: "a billion here and a billion there, and pretty soon you are talking about really money". If he only knew.

If AIG's situation weren't so serious, it would almost be funny. At least that is how Seth Meyers and Amy Poehler of Saturday Night Live report on AIG business conduct at the end of their most recent SNL video "Weekend Update" titled "Oh My God, Are You Really Serious !? !" The Weekend Update video also includes an analysis by SNL financial expert Oscar Rodgers about how to fix the current economic crisis.

Full post as published by Beyond Structured Settlements on October 10, 2008 (boomark / email).