Waxman Request Details of AIG Spending & AIG Wants $10 Billion MORE! [An official WTF moment....]
In a press release today, it was announced that the Oversight Committee has requested a detailed listing of all conferences, events, or retreats paid for by AIG this year, as well as bonuses paid to AIG executives. In the 3 page letter, which was addressed to Liddy, the current CEO of AIG, Chairman Waxman requests "additional information and documents as part of the Oversight Committee's investigation" into AIG. AIG's response? Well none yet, but they want another $10 billion dollars already on top of the $122.8 they have.
Waxman is asking AIG provide new information about its operations, including an explanation of how it has used money borrowed to date.
He also asks for AIG to "provide the Committee with a listing of all conferences, events, or retreats paid for by AIG, its subsidiaries, or affiliates from January 1, 2008 to present, along with documents sufficient to show the charges paid for each conference" and the same for any event for the next six months.
Waxman is also basically asking for all payroll information for every employee of AIG, its subsidiaries or affiliates; all participants in the Partners Plan; all participants in the Senior Partners Plan; and all employees in the Financial Products Division.
And finally Waxman is looking more into the actions of Joseph Cassano, William Kolbert, Pierre Micottis, and Doug Poling during a two year period including all emails, documents or other communications sent or reviewed by Cassano and some of his former colleagues over the last two years.
AIG's reponse? Well, nothing yet however, according to Bloomberg, AIG may seek a third source of government cash by tapping a Federal Reserve program that buys commercial paper, according to a person familiar with the matter, stating AIG will probably borrow less than $10 billion through the commercial paper program. AIG has already used two-thirds of its $122.8 billion credit line in the past month.
AIG's stock fell 14 percent today, to $2.10. AIG's stock has dropped by more than 95 percent this year.
Full text of the Letter to Edward Liddy (PDF) can be found on the Oversight Committee website or most of it can be found below.
During the Committee's hearing on October 7, 2008, witnesses were asked about a week-long conference held at the St. Regis Monarch Beach Resort approximately one week after the Treasury Department agreed to spend $85 billion to save AIG from collapse. Your predecessor, former CEO Robert Willumstand, told the Committee that the charges of $200,000 for rooms, $23,000 for spa services, and $7,000 on greens fees seemed "very inappropriate" and that he "absolutely" would not have approved them. His predecessor, former CEO Martin Sullivan, testified that, "if I'd have seen bills like that, I can assure you as the CEO I would've been asking questions." The next day, you sent a letter to Treasury Secretary Paulson explaining that although this retreat was "standard practice in our industry," you were "reevaluating the costs of all aspects of our operations in light of the new circumstances in which we are all operating."
Since then, there have been reports that AIG may have paid for other similar events held after receiving access to $85 billion in taxpayer funds, such as an event on September 20, 2008, at the Steven F. Udvar-Hazy Center in Washington, D.C., with over 800 people and a hunting trip in England for AIG executives that reportedly cost $85,000. Yesterday, you and the New York Attorney General announced that AIG would be canceling over 160 conferences and events.
To assist the Committee in investigating this issue, I ask that AIG provide the Committee with a listing of all conferences, events, or retreats paid for by AIG, its subsidiaries, or affiliates from January 1, 2008, to the present, along with documents sufficient to show the charges paid for each conference, event, or retreat, including lodging, transportation, food, drink, and other charges. I also ask that you provide a listing of any similar conferences, events, or retreats planned for the next six months.
In addition, I ask that you provide the Committee with additional information and documents relating to the actions taken by Joseph Cassano, the head of AIG's Financial Products Division; bonus payments made to AIG executives; and the use of funds provided by the federal government to date. Specifically, I request that you provide to the Committee:
1. All documents and communications, including e-mails, sent, received, or reviewed by Joseph Cassano, William Kolbert, Pierre Micottis, or Doug Poling during the two-year period ending on October 15, 2008;
2. All documents relating to the weekly "Global Conference Calls" conducted by AIG's Financial Products Division, including presentations, transcripts, minutes, and audio recordings, for the two-year period ending on October 15, 2008;
3. A listing of all compensation and perquisites provided to Mr. Cassano from 2000 to the present, other than salary and cash bonus information previously provided to the Committee;
4. For each of the following groups, the number of employees in each group; the total amount of base salary paid to each group annually from January 1, 2006, to the present; and the total amount of non-base salary cash compensation (e.g., cash bonus or other incentive payments) paid to each group annually from January 1, 2006, to present:
a. All employees of AIG, its subsidiaries, and its affiliates;
b. Participants in AIG's Partners Plan;
c. Participants in AIG's Senior Partners Plan; and
d. Employees of the Financial Products Division;
5. The total amount of funds received from the Federal Reserve through the $85 billion credit facility agreement announced on September 16, 2008, and the $37.2 billion securities lending agreement announced on October 8, 2008.
6. A detailed description of the uses of the funds identified in response to question 5, including the identities of any counterparties to which funds were provided for collateral or other purposes, the date of funds were provided to the counterparties, and the amount of the funds involved.
Please provide these documents and information to the Committee by Friday, November 14, 2008.
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