Monday, January 7, 2013

AIG PR Blitz “Thanks” Taxpayers For Bailouts

Something went horribly wrong in AIG's public relations department:
what is the message here from AIG?
“I needed money so I stole your car, robbed a liquor store, and now I am giving you your car back and I left a portion of the liquor store loot…”
And I'm proud of that. Thank you, America!

The PR dept didn't completely fail though: they were smart enough to disable the comments section:


  1. Interestingly enough on the subject of AIG suing the Federal Government or specifically former AIG CEO Hank Greenberg suing the federal government with AIG participating according to my friend Patrick he thinks Treasury and Geithner have a real problem. Everyone seems to be talking about Greenberg's lawsuit in New York that was dismissed but in fact the real action is at the US Court of Federal Claims in Lafayette Square DC right across from the White House(a court I suspect maybe five Ameicans have ever heard of). At the Court of Federal Claims it is starting to look like Treasury's legal team is in real trouble. There have already been two attempts to dismiss the case that have failed and now it looks to be heading to trial where Paulson, Bernanke, and Geithner may have to all testify under oath. Greenberg wants to 25 Billion Dollars from the Federal Government so the Justice Department(who is actually taken over the defense from Treasury and the Federal Reserve)has a lot on the line.

    The issue as I understand is in a "normal" Federal claims case the DOJ might very well start looking to settle(in particularily the part of DOJ that litigates these Federal Claims cases)however, the politics are very bad unless somehow Geithner and Bernanke and the original legal staff at Treasury is thrown under the bus.

  2. Greenberg's company has requested 16 million documents! Yves Smith had a long post on the case at Naked Capitalism, she says "I don’t see how Geithner, as a private citizen, could refuse; if Bernanke is reappointed, he might escape (judges tend to show some deference in calling top executives and officials to testify if less senior people have enough knowledge to appear in their place). Put it another way: if you thought Geithner squirmed when Elizabeth Warren grilled him, you haven’t seen anything till Boies has a go at him. That alone is reason to look on this suit with more sympathy than it otherwise deserves: it will lead any successor bailouter in chief to be a lot more careful and demanding when he shovels out cash to wards of the state." Read the rest of the analysis, it's fascinating:

  3. I commented on Naked Capitalism myself but it was too late as everyone else had moved on. My point was their were comments by Yves and others that because the lawsuit was dismissed(and in a very unflattering way by the judge) in NY it was basically cased closed for Greenberg and Boies. My point was that the government has tried to get the DC lawsuit dismissed TWICE and lost some key rulings on points of law which means while things might be looking up for the Treasury in NY they are definately looking down in DC. The government could try for dismissal again but I suspect they would really start pissing off the judge at this point. The key point of law ruling is the judge in DC(At the court of Federal Claims) basically ruled as a matter of law the Federal Reserve cannot take common equity in companies as collateral. The Fed could have loaned money at 90% interest to AIG but in the eyes of the DC Judge they cannot/couldn't take legal ownership.

    I do think on this issue and other that the NY Federal Courts are seen more "sexy" than the DC Federal Courts so they are given a certain degree of importance that is perhaps unwarrented.