What Chutzpah! AIG Wanted to Sue the Govt After Taking Huge Bailout Money -- Taibbi Shreds Wall St. Lies
Update: Amidst increasing outcry and scrutiny, AIG announced that it would not join the lawsuit.
The insurance giant AIG would like to thank you, America, for the kindly bailout money you handed over in 2008. It would also like another $25 billion.
This week, in a bait-and-switch feat that could only be accomplished by a corporation with a massive PR budget, AIG continued to release a series of “Thank You” videos and threatened the federal government with a $25 billion lawsuit, alleging that the corporation received the short end of the stick during the 2008 bailouts.
First, let’s examine the company’s outrageous public message:
Shots pan through the storm-ravaged town of Joplin, Missouri. The narrator makes promises about helping rebuild New York City after Hurricane Sandy. Everyone stresses that the bailout money has been paid back in full—with a profit!—a claim that Rolling Stone’s Matt Taibbi viciously debunks. And smiling people repeats over and over again: Thank you, America.
But behind the glossy PR stunt, AIG isn’t, really, all that grateful. In fact, the insurance giant—which nearly collapsed in 2008 under the weight of the terribly bad decision to insure predatory mortgages worth (supposedly, but not really) trillions of dollars— is still fuming over the terms of this voluntary bailout.
In 2008, the U.S. taxpayers gave AIG $182 billion in bailout money. But AIG isn’t satisfied because, compared to other bailed-out banks, it claims that the government exacted harsher penalties and terms. In fact, AIG is going as far as to claim that the federal government violated the Fifth Amendment, which bans the government from taking private property without “just compensation.”
This claim is literally absurd, rail government officials.
Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn’t generous enough,” said Elizabeth Warren. Even today, the government provides an ongoing, stealth bailout, propping up AIG with special tax breaks — tax breaks that Congress should stop.”
AIG isn’t the only bitter over the aftermath of the bailout.
As Taibbi writes:
Even worse was the incredible episode in which bailout recipient AIG paid more than $1 million each to 73 employees of AIG Financial Products, the tiny unit widely blamed for having destroyed the insurance giant (and perhaps even triggered the whole crisis) with its reckless issuance of nearly half a trillion dollars in toxic credit-default swaps. The "retention bonuses," paid after the bailout, went to 11 employees who no longer worked for AIG.
Meanwhile, earlier this week the New York Times reported that the banks reached a highly favorable settlement (favorable for Wall Street, that is) with regulators, another significant step in precluding anyone from facing criminal prosecution for crimes committed in the lead-up to 2008. Oh, and Bank of America plans to pay out out another $10 billion to cover its now-subsidiary Countrywide’s crimes of lying to Fannie Mae and generally screwing up the mortgage market. And no one from HSBC, which was recently found guilty of laundering money for Mexican drug cartels and breaking a whole host of banking laws, celebrated New Year’s behind bars.