Mr. Edward Liddy, Chairman and CEO of AIG, Testifies
March 18th, 2009 by KarinaThe Chairman and CEO of the American International Group (AIG) Edward Liddy testified before the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises this afternoon. Read Mr. Liddy’s prepared testimony>>
Chairman Frank (D-MA) and Mr. Liddy:
Chairman Frank:
“You’ve said some people are giving the bonuses back. I’m now asking you to send us the names of those who have received bonuses who have not given them back. Can you do that?”
Liddy: “Sir, I will if I can be absolutely assured that they will remain confidential.”
Frank: “I won’t give you that assurance, Sir, so if that’s the condition it will be my intention to ask this Committee to subpoena them. This is a situation where there’s a lot of public activity, I ask you to submit the names of the people who’ve received the bonuses, noting that they’ve paid them back or not.”
Chairman Kanjorski (D-PA) and Mr. Liddy:
Chairman Kanjorski:
“Do you realize that the actions that you take at AIG, and took in this precise case, not only impacts AIG and the potential of that reality occurring that you described, but it may have jeopardized our ability to get a majority of this Congress to support further largesse to provide funds to prevent a recession, depression, or meltdown?”
Rep. Brad Miller (D-NC) and Mr. Liddy:
Rep. Miller:
“Have you looked at whether Mr. Cassano or anyone else has any liability to your corporation on any basis?”
Liddy: “There is no evidence of wrongdoing in any of this.”
Miller: “This isn’t evidence of wrongdoing? This isn’t evidence of cooking the books? You said in your testimony, and I agree with this, that when you owe someone money, you pay that money back. The American people don’t owe anyone for the debts of AIG. It’s not our debt. Do you agree with that?”
Rep. Gary Ackerman (D-NY) and Mr. Liddy:
Rep. Ackerman:
“This old school teacher is going to give you a little bit of advice: pay the $165 million dollars back. That bonus money that has been given out, circumstances understood very clearly, you have a legal question here. But you have received or have access to $197.3 billion dollars of US taxpayer money, $165 million adds up to this old math teacher as less than one tenth of 1%. That’s not worth the aggravation, the angst that you have suffered and that this country is going through. Give that back, cut your losses, in financial terms, it just ain’t worth it. Do you think you could consider doing that?”
Rep. Dennis Moore (D-KS) and Mr. Liddy:
Rep. Moore:
“I don’t know that our country can afford to wait until 2012 for AIG to pay its money back, so if AIG continues to behave like this, despite being supported by not only by current taxpayers but also future generations, our children and our grandchildren, when will you pay the money back, when will AIG pay the money back?”
Rep. Elijah Cummings (D-MD) and Mr. Liddy:
Rep. Cummings:
“President Obama has made it clear that he’s trying to reverse our economy here and get it straightened out, and these people here are very central people, one making as much as $6.5 million dollars in bonuses. I would hope that they would stick around, take a regular paycheck like most people do, and stick around and help us get through this. They’ve benefited from the greatness of this country, and I would hope that they would do that, I hope you’ll appeal to them to do that.”
Rep. Stephen Lynch (D-MA) and Mr. Liddy:
Rep. Lynch:
“This is like the captain and the crew of the ship reserving the lifeboats. Saying ‘To hell with the passengers, we’re going to take the lifeboats for ourselves, for the crew and the captain.’ That’s what happened here. This is a violation of fiduciary duty. When you cordon yourself off and protect yourself, as the managers of this company and the people running this ship, and you say ‘We’re going down, so we’re going to make an agreement where we’re not affected by the bad decisions we make, we’re going to pass that all on to the investor and the shareholder.’ That amounts to malfeasance, not just nonfeasance, that’s a complete violation of trust and the people who invested in your company.”
See earlier coverage of the hearing on the Gavel>>
In addition, House Financial Services Committee Chairman Barney Frank announced this afternoon that the committee will hold a second hearing next week to more thoroughly examine the oversight of the federal government’s intervention at the American International Group (AIG) with Treasury Secretary Geithner and Federal Reserve Chairman Bernanke testifying:
“The Capital Markets Subcommittee has led the efforts to examine the government’s intervention at AIG,” said Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. “Because the Treasury Department and the Federal Reserve were unable to testify at our first Capital Markets hearing this week, I have worked with Financial Services Committee Chairman Barney Frank (D-MA) to convene a second hearing on AIG next week. I am pleased that on Tuesday afternoon, Treasury Secretary Geithner and Federal Reserve Chairman Bernanke will have the opportunity to explain directly and publicly the actions they have taken to rescue AIG from collapse and monitor the company’s performance since then. They have much to clarify for the American public. I look forward to their appearances.”
WHO: House Financial Services Committee
WHAT: “Oversight of the Federal Government’s Intervention at American International Group”
WHEN: Tuesday, March 24, 2009
2:00 p.m.
WHERE: 2128 Rayburn House Office Building