AUGUST 12, 2009
Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has uncovered documents from the Treasury Department related to the government’s bailout of insurance giant American International Group (AIG). The documents, obtained through the Freedom of Information Act, include internal Treasury Department emails and a series of outlines, presentation slides and articles outlining the details of the government’s "investment" in AIG, which at the time totaled as much $152 billion.
Following are highlights from the documents:
- A series of presentation slides detailing the terms of the AIG bailout. Included among the items is a slide entitled "Investment Considerations." On the slide the words, "The prospects of recovery of capital and a return on the equity investment to the taxpayer are highly speculative" are crossed out by hand.
- An outline that describes the strict measures of control "imposed" on AIG as a condition of the cash infusion, including those related to private executive compensation and corporate expenses. One document notes with respect to corporate expenses: The government’s corporate expense policy "…shall remain in effect at least until such time as any of the shares of the Senior Preferred are owend by the UST (United States Treasury). Any material amendments to such policy shall require the prior written consent of the UST until such time as the UST no longer owns any shares of Senior Preferred."
- A December 15, 2008 Treasury Department internal email from Jonathan Fletcher, Chief Interim Risk Officer for TARP (Troubled Asset Relief Program), revealing the existence of an internal government program to track the effectiveness (or lack thereof) of the AIG bailout. Fletcher writes: "As you know, we are obligated by EESA (Emergency Economic Stabilization Act) to determine the effectiveness of TARP investments…We would propose to follow up on the TARP investment by preparing a risk assessment note that spells out the objectives…and then create both a benchmark for AIG today and then establish metrics to track AIG’s progress (or lack thereof) in coming months." No documents related to this government tracking program have been released to the public.
"Clearly Treasury Department officials felt strongly that the $152 billion ‘investment’ in AIG would not be recovered by the taxpayers. And it appears someone at Treasury did not want the risky nature of the deal to be relayed to the American people," said Judicial Watch President Tom Fitton. "These documents show that some government officials recognize their responsibility to measure the effectiveness of their TARP investments. Yet the American people are misinformed and remain in the dark about how their money is being spent."