We didn’t watch the whole thing, but AIG CEO Edward Liddy’s plan to shock and awe Congress with platitudes today didn’t seem like it went very well. Congress was not impressed by his “broad brush” description of the restructuring project, code-named “Project Destiny” (they’ll wind down financial products, sell off some businesses, and everything will be right as rain in three to five years, was the gist). They were not fooled by the double-spacing in the documents he provided (they went to high school, too). They wanted meat. Grist. Details, even if they didn’t entirely understand them. Maryland representative Edolphus Townes, the chairman of the oversight committee, was particularly incensed by what he called the “shroud of secrecy” AIG operated under. (We would have gone with “tarp,” ourselves.)
“The one thing that stands out most about the collapse and rescue of AIG is the shroud of secrecy that has blanketed the entire sequence of events,” he said. “The questions we are raising today should be easy enough to answer, but unfortunately, AIG has failed to fully respond to straightforward requests for information. This cannot continue. We are hearing, ‘Trust us,’ but we are not willing to let $180 billion go just on trust.”
Liddy countered: “If all of the operating details were to be made public, it would put us at a severe disadvantage to repay the American public,” he said.
To recap: Congress, for the good of the American public, wants details, but AIG, for the good of the American public, doesn’t want to give them. What to do?
In the end, an uneasy compromise was reached: Liddy tentatively agreed to provide portions of the plan to Congress if it kept them confidential. Trust: It starts with the little things.
Lawmakers Press AIG’s Liddy [WSJ]
A.I.G. Says It Needs 3 to 5 Years to Restructure [NYT]
Congress grills AIG’s Liddy on repayment [CNN]
