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March 27, 2009

AIG Questioned on Billions in Bank Payouts
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The insurance giant AIG is facing new congressional and legal scrutiny
over how it funneled tens of billions of dollars in taxpayer bailout
money to banks facing huge losses that AIG had insured. In what some
have called the “backdoor bailout,” AIG gave nearly $13 billion to
Goldman Sachs and tens of billions more to other firms, including Bank
of America, Merrill Lynch, JPMorgan Chase, Morgan Stanley and several
foreign banks. On Thursday, twenty-six House Democrats signed a letter
by Congress member Elijah Cummings asking the bailout program’s
inspector general to investigate the payments. Meanwhile, New York State
Attorney General Andrew Cuomo subpoenaed AIG for information related to
the derivatives payments funneled to the banks.



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