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May 12, 2009 12:42 am
AIG’s chief executive is set to tell Congress on Wednesday that “rampant” criticism of the insurance group could destroy its value and hurt taxpayers.
Edward Liddy’s comment comes in prepared remarks to the House oversight and government reform committee, which plans to question Mr Liddy on Project Destiny, the plan to put the troubled group on an even keel.
While Mr Liddy is the subject of questions, both Republican and Democrat members of the committee appear to have other agencies in their sights.
Edolphus Towns, the committee’s chairman, has asked Mr Liddy to provide more information on the role of the Federal Reserve Bank of New York, saying the committee was unaware that the Fed was “so heavily involved in the management of AIG”.
Mr Towns also requested a host of documents, including business plans, with a deadline of Monday evening. AIG declined to say whether it had delivered all the paperwork but said: “We are working closely with the committee to provide responses in a timely and appropriate manner.”
Republican members led by Darrell Issa appear more concerned with the role of trustees appointed to safeguard the interests of taxpayers, who own 80 per cent of the company as a result of last year’s bail-out.
Mr Issa wants to know how the trust operates and said there should be more discussion of it as the government looks to increase its holding of common stock in some of the bailed-out banks by converting preferred equity.
But Mr Liddy, whose previous performance on Capitol Hill succeeded in taking some of the sting from lawmakers’ criticisms of the company, is trying to draw a line in the raft of separate enquiries.
“We need your help as well to achieve the restructuring of AIG successfully,” he says in the prepared testimony. “It is critical that we not lose sight of the fact that we are partners. When the employees of AIG make mistakes, we expect to be criticised.
“But rampant, unwarranted criticism of AIG serves only to diminish the value of our businesses around the world – to the detriment of our shareholders, including taxpayers.”
Bonus payments to AIG executives sparked a storm of criticism in Congress this year, with calls for a punitive tax on recipients of bonuses at any company that had taken money from the government’s troubled assets relief programme.
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