ProPublica

Journalism in the Public Interest

Gov’t-Owned AIG: We’re Still Lobbying!

Spencer Platt/Getty ImagesEarlier today, we wondered whether AIG is still lobbying the federal government. After all, taxpayers have lent the failing insurance giant roughly $120 billion and now own 80 percent of the company.

We spent days ringing AIG, the Fed and Department of Treasury, none of them could give us an answer.

Well, we finally have one. An AIG spokesman, Joseph Norton, told us via e-mail a few minutes ago: "We are not a GSE [government-sponsored entity] and are therefore not restricted. We remain a share-holder owned entity and continue advocacy activities."

In other words, AIG is going to keep lobbying. By contrast Fannie Mae and Freddie Mac immediately shut down their lobbying after the government took them over.

AIG and its subsidiaries have long been major players in Washington. In the first two quarters of this year, it spent $6.7 million on lobbying. In 2007, it spent $11 million. Overall, that's about 80 percent of what powerhouse lobbyists Fannie and Freddie spent combined.

AIG's decision doesn't sit well with government watchdogs.

"That's an absurd and unacceptable response," Fred Wertheimer of Democracy 21 told us. "Government officials should move immediately to correct this situation. The government now owns AIG. And the government should not be retaining private lobbyists and lobbying firms to lobby itself."

Wertheimer added, "It sounds like AIG officials don't seem to understand that the United States government owns them now, and they are not freewheeling independent operators in the private sector as they used to be."

This is I think the strategy of the government to stimulate again the economy. The money for bailout is really big, so what may happen is a success or a great failure. IBERIA recently came out with a statement to the effect that accepting TARP funds would put them at a disadvantage.  It’s admirable that they are giving the money back, but why would they take bailout money in the first place? There are several banks that are looking into giving their bailout funds back. IBERIA and Northern Trust Bank are both giving back the funds that they accepted as part of the TARP bailout program, claiming that they never needed the money in the first place.  Both banks have said that they only accepted the funding in the spirit of cooperation with the government programs giving aid to financial institutions.

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