BUSINESS
06/13/2009 05:12 am ET Updated May 25, 2011

Liddy Unsure If AIG Wrote Credit Default Swaps on GM, Chrysler Debt

Edward Liddy, chairman of American International Group, told a congressional oversight panel Wednesday that he did not know if AIG had issued credit default swaps related to debt held by General Motors or Chrysler.

Liddy's answer came in response to a query from Rep. Elijah Cummings (D-Md.).

"I don't know," said Liddy. "I saw that question some place and I just don't have any information on it."

Cummings called it "very important information."

"I'll be delighted to get the information and provide it to you," said Liddy.

Earlier this month, the Huffington Post first reported that Cummings, who's been watchdogging AIG since the government's initial intervention in September, was examining the possibility that investment firms who held auto-industry debt purposely drove Chrysler into bankruptcy in order to cash in AIG-issued swaps on that debt.

If Chrysler's creditors held swaps related to Chrysler debt, they could have benefited from a Chrysler bankruptcy and would have had an incentive to work against the resolution of negotiations to save the company from bankruptcy. AIG was and is a major player in the credit default swap game.

Cummings requested Neal Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), look into the matter and Barofsky agreed to do so.

Liddy testified before the House Oversight and Government Reform Committee, chaired by Rep. Ed Towns (D-N.Y.).

Ryan Grim is the author of the forthcoming book This Is Your Country On Drugs: The Secret History of Getting High in America

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