On Wednesday, the board at American International Group (AIG) declined to join a lawsuit against the federal government initiated by former CEO Maurice R. (“Hank”) Greenberg claiming that the 2008 bailout shortchanged investors and violated their Fifth Amendment rights.
AIG received $182.3 billion in taxpayer money as part of the Troubled Asset Relief Program (TARP) bailout under the Bush administration to keep that private company and billions more to keep other huge Wall Street banks from going under.
The U.S. taxpayers owned as much as 92 percent of AIG during the course of the TARP bailout. Although the company recently paid back the $182.3 billion to the treasury and generated $22 billion in profit for its shareholders since the bailout, apparently that is not enough profit for Greenberg. He seeks to recover even more money from U.S. taxpayers via his lawsuit.
That did not sit very well with several Democrats in the House and Senate, including newly-elected Elizabeth Warren, whose stern warnings may have impacted the board’s vote.
In a letter to AIG’s chairman, Robert S. Miller, three other Democratic lawmakers sternly urged the company to avoid “rubbing salt in the wounds” of taxpayers still furious about needing to bail out a private company. Their message: “Don’t do it! Don’t even think about it.”
Elizabeth Warren was nominated by President Obama last year to head the Consumer Financial Protection Bureau. Wall Street lobbyists and their GOP mouthpieces fought that bitterly and won, only to have Warren run for the Senate and win in Massachusetts. Now she will have a seat on the Senate Banking Committee, a position of even greater power in terms of regulating Wall Street. A classic case of be careful of what you wish for on Wall Street.
Here’s what Warren, the freshman Senator, had to say about AIG and Greenberg’s lawsuit:
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.
Referring to Warren as a freshman Senator is a bit of an understatement, since before being elected she earned a law degree from Rutgers University and after working as a law professor at Harvard University, she was selected to lead the National Bankruptcy Review Commission. In 2008, she headed the Congressional Oversight Panel for the TARP program.
Warren may be the most knowledgeable and experienced Senator in terms of the casino games played on Wall Street and how to regulate the banks that play games with U.S. lawmakers and taxpayers.
As for the ex-CEO of AIG, “Hank” Greenberg – Matt Taibbi says it very eloquently in his piece in the Rolling Stone magazine: “Hank Greenberg Should Be Shot into Space for Suing the Government over the AIG Bailout.”
It is becoming clear that there will be no gratitude, or any admission of wrongdoing from the Wall Street CEO’s whose companies were saved with taxpayer dollars. Nor will average Americans on “main street” reap any benefits from helping out these sociopathic narcissists.
Next time, let’s just let them fail and put them in jail. It worked in Iceland, why not here?
Elizabeth Warren biography
The Atlantic Wire