SOURCE: Judicial Watch

Judicial Watch

August 12, 2009 14:23 ET

Judicial Watch Uncovers Documents From Treasury Department Related to AIG Bailout

Documents Indicate Treasury Department Officials Believed Return on Taxpayer Investment "Highly Speculative"

WASHINGTON, DC--(Marketwire - August 12, 2009) - Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has uncovered documents from the Treasury Department related to the government's bailout of insurance giant American International Group (AIG). The documents, obtained through the Freedom of Information Act, include internal Treasury Department emails and a series of outlines, presentation slides and articles outlining the details of the government's "investment" in AIG, which at the time totaled as much $152 billion.

Following are highlights from the documents:

--  A series of presentation slides detailing the terms of the AIG
    bailout.  Included among the items is a slide entitled "Investment
    Considerations."  On the slide the words, "The prospects of recovery of
    capital and a return on the equity investment to the taxpayer are highly
    speculative" are crossed out by hand.
    
--  An outline that describes the strict measures of control "imposed" on
    AIG as a condition of the cash infusion, including those related to private
    executive compensation and corporate expenses.  One document notes with
    respect to corporate expenses:  The government's corporate expense policy
    "...shall remain in effect at least until such time as any of the shares of
    the Senior Preferred are owend by the UST (United States Treasury).  Any
    material amendments to such policy shall require the prior written consent
    of the UST until such time as the UST no longer owns any shares of Senior
    Preferred."
    
--  A December 15, 2008 Treasury Department internal email from Jonathan
    Fletcher, Chief Interim Risk Officer for TARP (Troubled Asset Relief
    Program), revealing the existence of an internal government program to
    track the effectiveness (or lack thereof) of the AIG bailout.  Fletcher
    writes:  "As you know, we are obligated by EESA (Emergency Economic
    Stabilization Act) to determine the effectiveness of TARP investments... We
    would propose to follow up on the TARP investment by preparing a risk
    assessment note that spells out the objectives... and then create both a
    benchmark for AIG today and then establish metrics to track AIG's progress
    (or lack thereof) in coming months."  No documents related to this
    government tracking program have been released to the public.
    

"Clearly Treasury Department officials felt strongly that the $152 billion 'investment' in AIG would not be recovered by the taxpayers. And it appears someone at Treasury did not want the risky nature of the deal to be relayed to the American people," said Judicial Watch President Tom Fitton. "These documents show that some government officials recognize their responsibility to measure the effectiveness of their TARP investments. Yet the American people are misinformed and remain in the dark about how their money is being spent."

Visit www.JudicialWatch.org to read the Treasury Department documents uncovered by Judicial Watch.

Contact Information

  • Contact:
    Jill Farrell
    202-646-5188