AIG May Sue Government Over Bailout

What a bunch of self-entitled pricks. I’m going to reproduce this Salon post in full, I hope they forgive me but it’s worth it.

AIG confirmed to Reuters today that it is considering joining a shareholder lawsuit against the federal government over the bailout, on the grounds that it deprived shareholders of billions of dollars.

The New York Times reported Monday night:

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”

The lawsuit was filed by Hank Greenberg, AIG’s former chief executive, in 2011. In an upcoming book, Greenberg writes that the because of the bailout, AIG “ultimately taken over and run aground by a cadre of auditors, lawyers, outside directors, and government officials,” according to Bloomberg, which obtained an excerpt.  “Contrary to proponents of anointing such professionals as ‘gatekeepers’ who police against corporate misconduct, the AIG story shows how such custodians run amok.”

The New York Fed dismissed the allegations on Tuesday. “AIG’s board of directors had an alternative choice to borrowing from the Federal Reserve and that choice was bankruptcy. Bankruptcy would have left all AIG shareholders with worthless stock,” a representative told Reuters.

AIG, which the government rescued in 2008 to the tune of $182 billion, rather ironically just launched an ad campaign called ”Thank you, America,” in which it thanks the country for the bailout.

#headdesk

Update: Sen. Elizabeth Warren.

“Beginning in 2008, the federal government poured billions of dollars  into AIG to save it from bankruptcy. AIG’s reckless bets nearly crashed our  entire economy. Taxpayers  across this country saved AIG from ruin, and it would be outrageous for this  company to turn around and sue the federal government because they think the  deal wasn’t generous enough. Even today, the government provides an ongoing,  stealth bailout, propping up AIG with special tax breaks—tax breaks that  Congress should stop. AIG should thank American taxpayers for their help, not  bite the hand that fed them for helping them out in a crisis.“

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Steve Hynd

Most recently I was Editor in Chief of The Agonist from Feb 2012 to Feb 2013. My blogging began at Newshoggers and I’ve had the immense pleasure of working with some great writers there and around the web ever since, including at Crooks & Liars. I'm a late 40′s, Scottish ex-pat, now married to a wonderful Texan, with Honours in Philosophy from Univ. of Stirling, UK 1986. I worked most of life in business insurance industry (fire, accident, liability) including 12 years as a broker/underwriter/correspondent at Lloyd’s of London. Being from the other side of the pond, my political interests tend to focus on how US foreign policy affects the rest of the planet. Other interests include early and dark-ages British history, literature and cognitive philosophy/science.

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