Dems Investigating Bush Administration Role In AIG Collapse

A House oversight panel is investigating the role Bush administration officials and regulators played in the collapse of American International Group. The first step of the investigation begins Thursday, House Oversight and Government Affairs Committee Chairman Ed Towns (D-N.Y.) tells the Huffington Post, when the committee hears testimony from former AIG CEO Hank Greenberg.

In November 2004, the Bush Justice Department and the Securities and Exchange Commission agreed not to prosecute AIG for allegedly helping companies fudge their books. In exchange, AIG agreed to host a government-appointed auditor in company meetings. At the time, Greenberg said it brought "finality to the claims raised by the SEC and the Department of Justice."

Towns said that Greenberg should be able to identify Bush administration officials involved in the decision-making around the settlement. Towns added the committee wants to know what Bush administration regulators knew about AIG's credit default swaps and other highly risky positions that brought the company down.

Asked if he would be directly pursuing Bush administration officials, Towns said: "No doubt about it. That's the reason I want to talk to Greenberg first. He might even point some folks out. That's of great interest to us."

Towns said the committee will also examine the AIG collapse to determine what legislation might be needed to make another occurrence less likely. Greenberg stepped down in 2005.

"The committees have not talked to Mr. Greenberg. They've only talked to Liddy" -- AIG's current head Edward Liddy -- "and Liddy has basically said, 'It was Greenberg's problem,'" Towns said.

"You can't have an investigation just moving forward. You have to look back as well. And that's what we're doing," said Towns.

The Bush administration's preferred way of dealing with corporate scandal was to defer prosecution. The Wall Street Journal reported last week that Bush prosecutors made 103 deferred and nonprosecution agreements with U.S. companies between 2002 and 2009. While Clinton was president, meanwhile, only 11 such pacts were entered into.

Criminal charges could result from the investigation, Towns said.

"All kinds of things could happen depending on what we find. And we're looking," he said. "Our eyes are wide open. Wherever the road leads us, that's where we plan to go."

Comments

[yurbud]

This is one of the more encouraging stories I've read about the Obama admin's response to the financial crisis.

[vietveter]

They will huff and puff and

accomplish nothing........ as usual




I would like to be wrong about this

[lentinelia]

But - you are not wrong.
You are correct.

[robeson]

History has shown that anything that collapsed or failed the past eight years may have GW Bush finger prints.

[Rule Of Law]

Bottom line---Bush admin knew for 5 years that this was coming and did nothing to stop it.

Wall Street gets ever richer off the American Treasury.

Still think it happened all by accident?

[All in All]

Greenspan knew, that's why He kept on lowering interest rates, made things oh-so much easier to take place!

[taricaziz]

I'm thinking that when the 401 was dreamed up, those guys peed their pants laughing at what they planned to do in the future . Get the people to donate their WAGES to the plan then steal it when conditions are right. OR RIPE.

[stargazer13]

thank god we did not let him privatize SSI or our elders would have been wipe out

[truthynesslover]

That was the plan no?

[BrickSykes]

Well, none of you have it exactly right. Maybe there isn't an "exactly right!"

Brick

[lentinelia]

The castratos of the democratic party have time to investigate Bush and his wrecking crew for the collapse of AIG - but they just can't get it up to investigate how they lied us into a war. Four thousand Americans dead for nothing means more to me that AIG.

A lot of this blame is on Obama. He's "looking forward".
Phooey.
They like the wars. Grown used to 'em. Want more of 'em.
They can all go to where the sun don't shine.

[Shashi0224]

Are you completely insane?

[Shashi0224]

Sorry, my completely insane post posted in the wrong place........that's the first time that happened to me!
Although, I do think investigating bush and his group of criminals is fine, I don't blame President Obama for not jumping in to those waters - too much else to occupy his time right now.

[lentinelia]

He doesn't have to lift a finger.
All he needs to say is that he supports efforts to determine how we could have been sold a bill of goods - lied to deliberately - and forced into a war from which we still cannot extricate ourselves.
Obama is covering his own keister.

[taricaziz]

I am the lead CASTRATA in the local church choir and resent the negative tone of your statement.

[lentinelia]

Sorry.
I did not mean to offend any artists.
I was referring more to the psychological use of the word - meaning when one has been stripped of one's manhood or womanhood.

[Eoin45]

You are another of the childish instant gratifcation junkies on this site. You think If a problem hasn't been addressed within your gnat's attention span then it won't be addressed at all. You need to grow up. Obama has been in office two months. Investigations take time, staff and money if they are to succeed. Right now the most pressing problem for most people in America is our financial crisis. Obama is rightfully tackling that first and investigating root causes is part of that. YOU can go where the sun don't shine.

[mendelcrosses]

Old White Men with blue eyes to investigate the status quo?

Good luck with it. They never find anything,those lot,do they?

I mean with all the evidence on 9/11 they still manage a report that was inconclusive and with no evidence included in it.

[Eoin45]

It was old white men with blue eyes who investigated and prosecuted the war criminals at Nuremburg. It was old white men with blue eyes who investigated Nixon and Watergate and drew the conclusion he was guilty. It was old white men with blue eyes who came up with the constitution that guarantees YOU the right to make such boneheaded generalizations about them.

[Telemachus]

Thank you.

There is always evidence to support pessimism. But now, for the first time in a long time, there's also evidence to support optimism. And I think our old, blue-eyed white politicians are starting to realize that a lot of us are mad as hell and might finally be paying VERY close attention to what they do.

[AlligatorShuz]

You forgot one it was blue/green/brown eyed white men to operated the Trans Atlantic slave trade. Where white men made MILLIONS TRAFFICING BLACK people FROM AFRICA. You also forgot to mention that Lehman Brothers loaned money to finance the purchase of the African slaves and Aetna Insurance who insured the human cargo and ships. That is a peice of history you omitted to mention...

[gotalifepost]

The CEO to blame is Joe Cassano .

[priscianusjr]

For sure, but Cassano worked for AIG, so the whole thing's a little more complicated. There's more to this than meets the eye
http://tpmmuckraker.talkingpointsmemo.com/2009/03/did_cassano_shut_out_aig_risk_officers.php

[Carolab]

Cassano was Greenberg's boy -- his favorite. Notice how Greenberg is trying to blame Sullivan instead.

[robodweeb]

DOW 8,000 today?

[bleek]

Vampires cannot be trusted to investigate other vampires.

[IntelligentDesign]

Trolls remind me of that shallow rote naysayer in the Monte Python skit where a chap purchases an argument session - only difference being that the comic character knew he was a naysayer whereas trolls actually believe they are engaging in meaningful honest debate - casualties of the Rush brain deadening syndrome.

[stargazer13]

that and all the lead that's been ingested can you really blame them

[IntelligentDesign]

Right minded people disliked Bush because he ran a criminal enterprise out of the Oval Office and ran the country into the ground - trolls dislike Obama because he's black - notice the stark disparity in reasoning skills.

[MidnightPath]

What an ignorant and absolutely baseless thing to say. Lib derangement syndrome.

[Steve Magruder]

But it happens to be the truth. There's no derangement in acknowledging the reality that only a few like yourself cannot see.

[Midnightrain]

Is it baseless? Please recall the "Magic N" song--not to mention countless other epithets that seem to arise each day.

Own your tactics.

[ToL1]

Hi MP! How are you?

[OrbitOne]

What a crock.

[All in All]

"Greenberg should be able to identify Bush administration officials involved in the decision-making around the settlement. Towns added the committee wants to know what Bush administration regulators knew about AIG's credit default swaps and other highly risky positions that brought the company down." _____________________________________________________

Congress: Greenberg what did the Bush administration regulators know about AIG's credit default swaps ?

Greenberg: (Turns around and looks at all the lawyers behind him,..Turns back) I'll have to get back to You on that....

Congress: Don't You know the answer to the previous question asked of You ?

Greenberg; Well... I wouldn't want to answer for another group of people, all I can tell You is that AIG may have spoken to some of the Bush administrations regulators about AIG's credit default swaps....

Congress:While You were AIG's CEO did You fully review & build strategies and outlooks around AIG"s credit default swaps ?

Greenberg; Well... Yes, the financial department insured Me that all the outlooks were looked at and fully strategized for maximum preformance, and that the regulators approved of the credit default swaps at that time.

Congress: So Mr.Greenberg the bush administration regulators did also review AIG's credit default swaps ?

Congress Chairman: (Gavel...) The Congress Mans time is up, next representative.

That's the way that I see the hearing going..............

[monicaangela]

You could be correct AllinAll, however, I have been an administrator in what could be considered a large company. There are notes and records kept the cover ones proverbial you know what, at all times. New management gets access to those notes and records, Liddy knows as much as Greenberg, these questions could have been asked of him. However, the public already knows the answers to these questions. Paulson knew, and if he knew Bush and C h e n e y knew, it's as simple as that.

[All in All]

I would suppose so for the most.

Like Roger Clemens said to Congress, and some Congress People now say themselves "It is what it is".... (or so it seems).

[ToL1]

Michelle Obama broke protocol by wrapping her arms around Queen Elizabeth. At this point, to prevent any more possible international screws ups, it might be wise for Michelle to be taught proper decorum when in the presence of royalty. I think she and the President should offer their sincere apologies to the Queen.

[Midnightrain]

Eff you.

She's her own royalty. She approached the Queen from her own culture. Now shut the hellup.

[ToL1]

Michelle Obama is not royalty. Even the President isn't royalty. He is merely a very, very powerful public servant.

[IntelligentDesign]

Take a hike loser.

[ToL1]

Truth hurts...I know.

[robodweeb]

Did Obama give her a back rub?

[ToL1]

No, but you do realize Chancellor Merkel is not royalty, don't you?

[owiseone]

Very funny!

[robodweeb]

Is there a photo of Michelle with her arms "wrapped around" the Queen?

I haven't seen it.

Oh I get it... you're making stuff up.

[ToL1]

L I ES, rob. It has been all over the news. Move out of your mother's basement and get cable.

[MissingAmerica]

Michelle is a hugger, a loving person brought up in a world where we hug! I'm sure the Queen can look past this breach in protocol! If this is the worst "screw-up" we see from this administration, it's a darn sight better than what we had the last 8 years. As for the actual news that the Bush Administration will be investigated for ignoring the fact they knew that AIG was cooking the books, it's about damn time! It would seem that the Bush/Cheney administration was so corrupt that we have 100 different avenues which we can take down the road to prosecution and accountability. I'd rather be hugged than screwed anyday!

[SueMVetforObama]

"Ultimately, the final judge of the bill is history. Ultimately, as you look at the bill, you have to ask yourself, Will people in the future be trying to repeal it, as we are here today trying to repeal--and hopefully repealing--Glass-Steagall? I think the answer will be no. I think it will be no because we are doing something very different from Glass-Steagall. Glass-Steagall, in the midst of the Great Depression, thought Government was the answer. In this period of economic growth and prosperity, we believe freedom is the answer.

"This is a deregulatory bill. I believe that is going to be the wave of the future. Although this bill will be changed many times, and changed dramatically as we expand freedom and opportunity, I do not believe it will be repealed. It sets the foundation for the future, and that will be the test.

Phil Gramm - Nov 4, 1999

http://banking.senate.gov/prel99/1104sta.htm

Congress needs to reregulate now. Re-stovepipe the "investment" industry.........

[essbird]

Thank you for this quote.

[robodweeb]

In 2001, he (Phil Gramm) told a Senate debate: "Some people look at sub-prime lending and see evil. I look at sub-prime lending and I see the American dream in action."

According to the New York Times, federal records show that from 1989 to 2002 he was the top recipient of campaign contributions from commercial banks and in the top five for donations from Wall Street. At an April 2000 Senate hearing after a visit to New York, he said: "When I am on Wall Street and I realise that that's the very nerve centre of American capitalism and I realise what capitalism has done for the working people of America, to me that's a holy place."

[letsbepeaceful]

IMO, it was not so much lending to those with slightly tarnished credit scores but the ridiculous terms of the mortgages, which were 'approved' by mortgage brokers knowing that the mortgages were going to be packaged, split and sold. THAT'S where we should investigate - all those that approved those unbelievable loans.

I suspect that there are a LOT of families out there with less than perfect scores who could have managed ordinary loans with appropriate interest, but were convinced that these interest-only or oddball ARM's would be just fine, then got horribly stuck when they reset.