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Eliot Spitzer Tells Fareed Zakaria: AIG Has Bigger Problems (VIDEO)

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This Sunday, on Fareed Zakaria GPS, Zakaria's guest will be former New York Governor Eliot Spitzer. CNN previewed the piece in the Situation Room today, in which Zakaria and Spitzer discuss the presence of "hints of a looming disaster" when Spitzer had AIG under investigation "years ago as the New York State Attorney General":

ZAKARIA: So, do you think the problems that AIG got into later on stemmed from some of the same practices that you were trying to get at?

SPITZER: They stemmed from an effort at the very to to gin up returns whenever, wherever possible, and to push the boundaries in a way that would garner returns almost regardless of risk. Back then, I told people that AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued. And as I've written...

ZAKARIA: Meaning what? Meaning that a lot of the money that we the taxpayers have given to AIG has ended up being paid to Goldman Sachs.

SPITZER: Precisely.

ZAKARIA: And other companies.

SPITZER: The so-called counterparties to these very sophisticated financial transactions. When AIG initially received $80 billion, the decision that was the consequence of a very brief meeting of the President of the New York Fed, the Secretary of the Treasury, perhaps Chairman Bernanke, and arguably, some reports say, the chairman of Goldman Sachs. Eighty billion dollars, virtually all flowed out to counterparties - $12.9 billion dollars to Goldman Sachs. Why did that happen, what questions were asked, why did we need to pay one hundred cents on the dollar for those transactions if we had to pay anything, what would have happened to the financial system had it not been paid...these are the questions that should be pursued. The bonuses are a real issue. It touches us viscerally. But the real money, the real structural issue is the dynamic relationship between AIG and the counterparties.

ZAKARIA: You know that a number of people watching you are going to say, "Eliot Spitzer doesn't have credibility to talk about these issues" because of what happened over the last year with your own behavior. What would you say to them?

SPITZER: I would say to them that I never held myself out as being anything other than human. I have flaws as we all do, arguably. I failed in a very important way, with my personal life and I have paid a price for that, with my family and with my wonderfully, amazing, forgiving wife, and with my three daughters. And we'll rebuild those relationships and hopefully as time goes on. I also feel that to the extent that I am asked that I can contribute to a very important conversation that I will do that as well. That is our right, arguably our obligation to our citizens. I will do what I can, and with full awareness and heaviness of heart about what I did.

Watch:

In general, I think that people are really starting to wake up to Zakaria's qualities as the host of his eponymous show, and the refreshing seriousness of the topics he pursues. I noticed, this past Monday, a general uptick of Zakaria-centered praise. I'm guessing that many people tuned in to see John King's widely-panned interview with Dick Cheney and were entranced and relieved by the substance that followed later in the afternoon. At any rate, Spitzer's take on this matter will be an interesting one, and may give rise to the long-awaited "what if the Spitzer scandal never happened?" story I've been hoping that a reporter with the right pedigree might deliver.

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