Scandal: AIG

Updated March 18

 The federal government has loaned AIG around $170 billion since mid-September to rescue the faltering insurance company from bankruptcy. But the now-taxpayer-owned company has raised ire for burning through the cash, potentially hiding its losses, lobbying the government in favor of deregulation and doling out millions in bonuses.

AIG found itself on shaky footing after the company's financial products unit churned out $440 billion in mortgage-related credit default swaps, a type of unregulated insurance, without keeping the capital needed to back up its bets. When customers came a-knockin', AIG wasn't left with many options -- or any capital. The federal government has subsequently stepped in four times to rescue the foundering company:

Shortly after its fourth federal bailout, AIG caused an uproar with the news that it was doling out hundreds of millions of dollars in bonuses to employees in its financial products unit. It also disclosed the names of its trading partners: U.S. and foreign financial institutions that have reaped $49.5 billion from AIG's rescue funds.

Other criticisms of AIG have cropped up too. It's been scrutinized by the FBI over whether it concealed massive losses on mortgage-related investments from investors and auditors. It was criticized for lobbying against a new law that cracks down on mortgage fraud after receiving government aid. And, as ProPublica reported in February, AIG didn't tell potential buyers of Alico, one of its subsidiaries, about an unresolved tax issue.

Essential Reading

 

Latest Stories

Goldman Sachs Got Billions From AIG For Its Own Account, Panel Finds Huffington Post, 1/27

AIG, Fed Czar Reach Deal on Rest of Bonus Pay to be Returned Wash. Post, 3/12

E-Mails Inside AIG Reveal Some Execs’ Early Concern Washington Post, 12/30

Goldman Fueled AIG Gambles Wall Street Journal ($), 12/14

Prosecutors Are Poised to Impanel AIG Grand Jury Wall Street Journal ($), 9/11

AIG Seeks Clearance For More Bonuses Washington Post, 7/10

Employees at Troubled AIG Unit Describe Tyrannical Head Vanity Fair, 7/7

E-Mails: U.S. Considered Letting AIG File for Bankruptcy Fox Business, 6/30

AIG Hires Former Critic to Sell Off Assets ProPublica, 6/29

AIG Balks at Claims from Jet Ditched in Hudson New York Times, 6/12

Lawmakers Take AIG to Task Over Secrecy Wall Street Journal ($), 5/14

AIG Risk Managers Got Bonus Pay After Rescue Wall Street Journal ($), 5/14

Little Oversight of AIG Before Its $180 Billion Bailout The Hill, 5/14

Officials Knew of AIG Bonuses Months Before Firestorm Washington Post, 5/13

AIG Sees Long Road Back From the Brink Wall Street Journal ($), 5/11

AIG’s Loss Expected to Reach $5 Billion Wall Street Journal ($), 5/7

AIG Bonuses Four Times Higher Than Reported Politico, 5/6

The $30 Trillion Market No One Cares About The Street, 4/28

Criminal Authorities Focus on 3 in Probe of AIG Wall Street Journal ($), 4/28

Treasury to Give AIG $30 Billion, Recoup Bonus Payments ProPublica, 4/21

AIG Gets Aid, Minus Bonus Pay Wall Street Journal ($), 4/21

AIG Delays Proxy Filing to Reshuffle Its Board Wall Street Journal ($), 4/20

3 AIG Trustees are Quiet, Perhaps to a Fault New York Times, 4/20

AIG Chief Owns Significant Stake in Goldman New York Times, 4/17

AIG Near to Key $2 Billion Sale Financial Times, 4/16

Congress Probing AIG Spin Shop TPMMuckraker, 4/14

Challenges Remain for AIG, Employees Washington Post, 4/14

Towns in Germany and Transit in Washington Feel AIG Pinch Wall Street Journal ($), 4/13

AIG Didn’t Adopt Global Derivatives Protocol Financial Times, 4/13

AIG Exec: Action on Bonuses May Cost Taxpayers Wall Street Journal, 4/13

This Week in Scandals: Bailout Moves Threaten to Backfire ProPublica, 4/10

Catch-22: Can AIG Repay Taxpayers? ProPublica, 4/9

Catch-22: Can AIG Repay Taxpayers? ProPublica, 4/9

Bailout Overseer is Auditing AIG on Its Payouts Reuters, 4/8

Buyers Arise for AIG Unit as Some Bids Scrape Floor Wall Street Journal ($), 4/7

Does AIG Really Need to Pay Its Counterparties in Full? ProPublica, 4/7

Does AIG Really Need to Pay Its Counterparties in Full? ProPublica, 4/7

This Week in Scandals: Accounting, AIG and More ProPublica, 4/3

AIG Versus Greenberg: The War Intensifies ProPublica, 4/2

Former CEO: AIG Debacle Not My Fault Wall Street Journal ($), 4/2

AIG Declares War on Former CEO ProPublica, 4/1

AIG Board’s Pay Panel Falls Under Shareholder Fire Wall Street Journal ($), 4/1

Congress Seeks Independent Reports on AIG Wall Street Journal ($), 4/1

AIG Crisis Could Be the Tip of an Insurance Iceberg Los Angeles Times, 3/31

50 State Regulators Probe AIG Workers’ Comp Rates Bloomberg, 3/31

Inquiry Asks Why A.I.G. Paid Banks New York Times, 3/27

AIG Exec Defends Bonuses to Conn. Lawmakers AP, 3/27

The U.S.‘s Fly on the Wall at AIG Wall Street Journal ($), 3/27

This Week in Scandals: AIG Pay and Bailout Dismay ProPublica, 3/27

In Depth: Wall Street’s Power Grab Rolling Stone, 3/27

Top Risk Officers Remain at AIG Helm Wall Street Journal, 3/27

NY AG to Subpoena AIG on Credit Default Swaps Wall Street Journal, 3/26

AIG Isn’t the Only Firm to Dole Out ‘Retention’ Bonuses New York Times, 3/26

Some at AIG Buck Efforts to Give Back Bonuses Wall Street Journal ($), 3/26

Is Probe Of AIG Bailout, Payments To Counter-Parties, In The Offing? TPMMuckraker, 3/25

AIG Exec Reportedly In Congressional Investigators’ Sights TPMMuckraker, 3/25

London AIG Execs ‘Hold Out in Bonus Assault’ The Times, 3/25

Drive to Tax AIG Bonuses Slows Wall Street Journal ($), 3/25

AIG Exec Blames Swaps Debacle on Handful of Employees New York Times, 3/25

How Hard the Fed Looked for AIG’s Potential Losses ProPublica, 3/25

Treasury Preserves Bank Payday With AIG Rescue Cash Bloomberg, 3/24

IRS Targets AIG’s Tax Deals Wall Street Journal ($), 3/24

$50 Million in AIG Bonuses to be Repaid New York Times, 3/24

Rangel’s Complicated Relationship With AIG New York Times, 3/23

AIG’s Essential Asset, Its Brand, Is Tarnished New York Times, 3/23

Opinion: Feds Must Investigate AIG’s Fishy $12.9 Billion to Goldman Slate, 3/23

AIG’s Rivals Blame Bailout for Tilting Insurance Game Wall Street Journal ($), 3/23

Conn. AG Finds More AIG Bonuses Hartford Courant, 3/23

Geithner Aides Worked With AIG for Months on Bonuses Wall Street Journal ($), 3/23

AIG Lobbied to Lower its Taxes Wall Street Journal ($), 3/23

Administration Seeks Increase in Oversight of Executive Pay New York Times, 3/23

Who Wrote the AIG Bonus Loophole? CNN, 3/20

Top Geithner Aide Fought CEO Pay Reform Mother Jones, 3/20

Lawyer at Troubled AIG Unit Got Top Bonus Wall Street Journal ($), 3/20

Many in Gov’t Knew About AIG Bonuses Weeks Ago New York Times, 3/20

AIG Sues US for Return of $306 Million in Tax Payments New York Times, 3/20

Bailout Auditor Launches Probe into AIG Bonuses AFP, 3/19

House Votes to Recoup Bonuses From Bailed-Out Firms Reuters, 3/19

Conflicting Accounts About Geithner’s Involvement With AIG Bonuses ProPublica, 3/19

Critics Got Donations From AIG Wall Street Journal ($), 3/19

Dodd’s Amendment at Crux of Bonus Issue Wall Street Journal ($), 3/19

Key Argument for AIG Bonuses Questioned Washington Post, 3/19

AIG Unit Was Known for its Catered Meals and Hefty Bonuses Los Angeles Times, 3/19

How the Fed Failed to Tell Obama About the Bonuses Washington Post, 3/19

Which Hedge Funds Are Collecting Under the AIG Bailout? ProPublica, 3/19

Treasury Officials Explicitly Allowed AIG Bonuses Los Angeles Times, 3/19

Timeline: AIG and Their Bonuses ProPublica, 3/18

AIG’s Bonus Blow-Up: The Essential Q&A ProPublica, 3/18

AIG’s Bailout Priorities Are in Critics’ Cross Hairs New York Times, 3/18

Watchdog: AIG May Need Even More Aid Investment News, 3/18

Senator Outraged over AIG Funneling $2.5B to UBS Investment News, 3/18

AIG Bonus Scandal—Bernanke and Fed Signed Off ProPublica, 3/18

Paying AIG Workers to Fix Their Own Mess New York Times, 3/18

Washington Knew AIG Was Preparing to Pay Bonuses AP, 3/18

Congress Threatens to Tax Back AIG Bonuses McClatchy, 3/18

Hedge Funds May Get AIG Cash Wall Street Journal ($), 3/18

AIG CEO: Our Mission is Repairs and Repayment Washington Post, 3/18

AIG Staff: We Deserve This Money The Hill, 3/18

NY AG Details Million Dollar Bonuses at AIG New York Times, 3/17

Bernanke Warned of Fed’s ‘Limited Rights’ in AIG Oversight ABC News, 3/17

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