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Washington, DC—Today, Congressman Elijah E. Cummings (D-Md.), a senior member of the House Committee on Oversight and Government Reform, sent letters to Committee Chairman Edolphus Towns (D-N.Y.) and Ranking Member Darrell Issa (R-Calif.) and to the Inspectors General of the Troubled Assets Relief Program and U.S. Treasury requesting investigations into inconsistencies between information that American International Group, Inc., (AIG) CEO Edward Liddy provided during a Congressional hearing and information the company’s spokesperson provided to the media the following day (text of the letters below).
During a March 18, 2009, hearing before the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, Congressman Cummings asked Mr. Liddy, who was testifying under oath, “How much in bonuses—not retention payments—have you paid to AIG employees in 2008, and what was the range of the bonuses?”
Mr. Liddy responded, “I think it might have been in the range of $9 million.”
However, a March 20, 2009, story in Politico by Eamon Javers states that AIG spokesman Nick Ashooh “says that his firm paid 2008 bonuses outside the controversial payouts to the AIG Financial Products unit of the company. Those payments amounted to about $120 million to a pool of more than 6,000 employees.”
Alarmed by the stark difference between the $9 million in bonuses that Mr. Liddy testified went to all AIG employees and the $120 million that Mr. Ashooh told Politico went to non-FP employees, Congressman Cummings contacted the Politico reporter to ensure that the figures were reported accurately to reflect traditional bonuses and did not include retention payments. The reporter confirmed that the figures were for bonuses—not retention payments.
“For months, Mr. Liddy has been less than forthcoming in his responses to inquiries from my office, and we have witnessed a pattern of inconsistencies in the information that his company has provided,” Congressman Cummings said. “Given the taxpayers’ $180 billion investment in AIG, as well as the role this company plays in maintaining global financial stability, it is important that we have accurate information about how money is being spent.”
Text of the letter to Inspectors General Barofsky and Thorson:
March 25, 2009
The Honorable Neil M. Barofsky
Office of the Special Inspector General for the
Troubled Assets Relief Program
1500 Pennsylvania Avenue, NW, Suite 1064
Washington, DC 20220
The Honorable Eric Thorson
Inspector General
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Dear Inspectors General Barofsky and Thorson:
While the country discusses the retention payments paid by American International Group, Inc. (AIG) to the employees of its Financial Products division, I want to ensure that this outrage does not obscure important details.
On Wednesday, March 18, Mr. Edward Liddy, Chairman and Chief Executive of AIG, spent the day before the Financial Services Committee. At the end of the day, in response to my questions, Mr. Liddy testified, under oath, that AIG had paid out $9 million in bonuses – not retention payments – to employees of AIG.
However, on Friday, March 20, a story by Eamon Javers ran in Politico in which AIG spokesman Nick Ashooh stated that AIG paid bonuses of $120 million. Upon reading this figure, which sharply contrasts with the $9 million figure Mr. Liddy gave me under oath, I contacted Mr. Javers to request clarification. Mr. Javers confirmed that the $120 million applied to 2008 bonuses – not retention payments – paid to AIG employees.
In light of the taxpayers’ enormous $180 billion investment in AIG for the sake of global financial stability, AIG’s use of these funds must be reviewed with the utmost scrutiny. Since the initial federal financial injection into the private markets, I have tried to get credible information from Mr. Liddy on the amount of bonuses and retention payments doled out with taxpayer money. I have found his responses inconsistent at best, and I remain concerned.
I appreciate the work your offices have done, and respectfully request that you investigate the inconsistencies between Mr. Liddy’s testimony and the statements made to Politico by AIG spokesman Mr. Ashooh and provide clarification on the true amount of bonuses paid to AIG employees in 2008.
Sincerely,
Elijah E. Cummings
Member of Congress
March 25, 2009
The Honorable Edolphus Towns
Chairman, Committee on Oversight and Government Reform
2157 Rayburn House Office Building
Washington, DC 20515
The Honorable Darrell Issa
Ranking Member, Committee on Oversight and Government Reform
B350A Rayburn House Office Building
Washington, DC 20515
Dear Chairman Towns and Ranking Member Issa:
I am pleased that the Committee on Oversight and Government Reform will hold a hearing on American International Group, Inc. (AIG). Continued daylight and transparency are essential to holding AIG accountable to their taxpayer shareholders.
On Wednesday, March 18, Mr. Edward Liddy, Chairman and Chief Executive of AIG, testified before the Financial Services Committee. At the end of the day, in response to my questions, Mr. Liddy testified, under oath, that AIG had paid out $9 million in bonuses – not retention payments – to employees of AIG.
However, on Friday, March 20, a story by Eamon Javers ran in Politico in which AIG spokesman Nick Ashooh stated that AIG paid bonuses of $120 million. Upon reading this figure, which sharply contrasts with the $9 million figure Mr. Liddy gave me under oath, I contacted Mr. Javers to request clarification. Mr. Javers confirmed that the $120 million applied to 2008 bonuses – not retention payments – paid to AIG employees.
This is the latest in a series of instances where Mr. Liddy has been less than forthcoming in response to questioning from myself and other Members. Further, it underscores the need for Mr. Liddy to testify in front of the Committee and clarify the past inconsistencies that I have outlined for you in previous correspondence.
In light of the taxpayers’ enormous $180 billion investment in AIG for the sake of global financial stability, AIG’s use of these funds must be reviewed with the utmost scrutiny.
Again, I appreciate your intention to hold a hearing on AIG, and respectfully renew my request that you invite Mr. Liddy to the proceedings.
Sincerely,
Elijah E. Cummings
Member of Congress
Cc: The Honorable Paul E. Kanjorski
Chairman, Capital Markets Subcommittee
Financial Services Committee
The Honorable Scott Garrett
Ranking Member, Capital Markets Subcommittee
Financial Services Committee
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