AIG Hearing

Today, the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises is holding a hearing to fully examine the American International Group (AIG), how it got into its current situation, why it has received so much federal assistance, and how to move forward. Watch the live web cast>>

Chairman Kanjorski (D-PA):

Rep. Kanjorski: "Something is seriously out of whack, and AIG needs to fix it now. We face the most challenging economy since the Great Depression. Many have made personal sacrifices to survive these difficult times. AIG and its employees should do the same."

Rep. Paul Hodes (D-NH):

Rep. Hodes: "As far as the American people are concerned, I think AIG now stands for arrogance, incompetence, and greed. It is unacceptable the TARP funds are being pocketed by AIG executives and it must not be allowed to stand...It is ridiculous to stand on these contracts as justification for paying the bonuses given the circumstances that AIG found itself in. As representatives of the taxpayers, I believe that the contract provisions, which allow bonuses for failure, are unconscionable, and should be held to be invalid or unenforceable."

Rep. Gary Peters (D-MI):

Rep. Peters: "In my Congressional district in Michigan, there are thousands of UAW employees who have employment contracts, and they've been told they need to renegotiate those contracts and make concessions to justify taxpayer investments. There are thousands of white collar employees with employment contracts who have forgone promised bonuses and benefits and have taken pay cuts in order to save the companies they work for. People are sick of this double standard where working class and middle class workers are treated differently than the financial industry executives."

Rep. David Scott (D-GA):

Rep. Scott: "It seems to me, that somebody was saying, 'How can we even think of bonuses to be given to a division, and rated at 450 million dollars, at the very time that that division is losing buckets of money?' And then five months later, here we come, they [AIG] are asking, and out of the Federal Reserve Rescue Fund we give them 85 billion dollars. Seems to me that somebody was asleep at the switch. This is a profound issue that borders on fraud and criminality."

Rep. Brad Miller (D-NC):

Rep. Miller: "There is a great deal of evidence that AIG is not solvent, has not been solvent for a long time, much longer than a year, and at least their top executives knew that, they were cooking their books. The Oversight and Government Reform Committee last fall had a hearing, and in lieu of deposition Joseph W. St. Denis provided written answers...his duties were documenting accounting for proposed transactions. His statement is that he resigned because he was consistently excluded from valuing the assets, from performing his job by Mr. Cassano, that Mr. Cassano didn't want him to be part of valuing their super senior credit default swap portfolio, and he believed because he would bring transparency to it as the accounting rules required. Have we looked at the liability, if in fact they knew they were insolvent and they're cooking their books?"

Read prepared testimony:

Mr. Scott Polakoff, Acting Director, Office of Thrift Supervision

The Honorable Joel Ario, Insurance Commissioner, Pennsylvania Insurance Department, on behalf of the National Association of Insurance Commissioners

Ms. Orice M. Williams, Director, Financial Markets and Community Investment, Government Accountability Office

Mr. Rodney Clark, Managing Director, Insurance Ratings, Standard & Poor's

Mr. Edward M. Liddy, Chairman and Chief Executive Officer, American International Group

House Leaders Announce Action to Recoup Taxpayers Dollars from AIG and Other Companies>>