You might imagine that by now the public would know every last cause and consequence of the government's $180 billion bailout of insurance giant American International Group. The AIG deal has been the subject of dozens of public hearings (including a confrontational one this week), an inspector general's report last fall and a recent congressional subpoena that produced some 250,000 documents.
But many people inside and outside the government believe the whole story has yet to be told.
Among them is Rep. Steve Israel (D-N.Y.), who this week introduced a bill that he said would "get to the bottom of the AIG collapse." Israel's Financial Crisis Public Disclosure Act would require the Treasury Department to obtain and publicly release all internal AIG e-mail related to the current financial crisis. Treasury would put the results online for citizens and journalists to examine.
"My bill will force AIG to publicly open company e-mails from top employees so we can find out what they were thinking as they made decisions that wrecked our economy," Israel said in a statement.
The Investigative Fund previously reported on calls for AIG's trustees to make public a decade's worth of AIG's e-mail and internal accounting documents. Experienced fraud investigators, including former New York Governor Eliot Spitzer and University of San Diego Law School professor Frank Partnoy, have made that request. So far the trustees - appointed by the Federal Reserve Bank of New York, which made the original decision to bail out AIG - are resisting the idea.
Most recent scrutiny of the bailout has centered on the Fed's decision to use about $24 billion in government money to help AIG settle deals with big banks.
AIG had sold the banks insurance on risky mortgage investments. When the insured investments soured, AIG owed billions to Goldman Sachs, among others. Instead of honoring the insurance, AIG used taxpayer funds to buy the mortgage investments from the banks at 100 cents on the dollar, even though they were worth much less.
Rep. Darrell Issa of California, the ranking Republican on the Committee on House Oversight and Government Reform, recently released e-mails showing that the New York Fed kept details of these payouts secret while now-Treasury Secretary Timothy Geithner was in charge of the New York Fed. Rep. Ed Towns (D-N.Y.), chairman of the oversight committee, ultimately subpoenaed the New York Fed for all documents related to the payouts, including Geithner's e-mail and phone logs.
The documents showed Geitner approved the full payouts, but did not suggest he was involved in concealing them. E-mails show that some Fed officials questioned the decision to pay the banks in full. One document also indicated that Goldman had approached AIG about tearing up the insurance contracts months before the government got involved.
Still, for all this congressional digging, much remains unknown about the causes of AIG's collapse and we surely haven't heard the last revelation.