Please Sir Can I Have Some More Says AIG

They’re calling it a bailout from the bailout.

Only weeks after insurance monolith American International Group (AIG) received loans of $85 and $38 billion from US taxpayers it wants more.

Seems the interest rate was too high. And the loans aren’t covering business trips to places like the luxe Pointe Hilton Squaw Peak Resort in Phoenix where AIG directors insouciantly sipped drinks on the patio last week before posting yesterday’s $24.5 billion quarterly loss.

And how was your week?

Like Enron, most people had never heard of AIG until it was ruining the economy.

And like Enron it excelled at faux deals like the one in 2000 where Berkshire Hathaway Corporation subsidiary Gen Re agreed to buy $600 million in reinsurance coverage — creating the appearance of a $100 million risk — but secretly AIG agreed to return the fee and pay Gen Re $5 million for its trouble.

AIG also loved to insure collateralized debt obligations (CDOs) because it didn’t have to own the illiquid paper and taint its balance sheet with risk and the CDOs paid face value to credit swappers even if their ratings tanked which of course they did.

Nice work if you can get it — and you’re not the counterparty.

Also like Enron, AIG was blinded by hubris and had risk control models that covered everything except people defaulting on their mortgages — they wouldn’t do that, right? — and parties taking out pox-on-your-head credit swaps on AIG itself. Oops.

But whereas Enron’s Jeffrey Skilling and Andrew Fastow are sequestered at Club Feds–as are WorldCom’s Bernie Ebbers, Tyco’s Dennis Kozlowski and Hollinger press baron Conrad Black– AIG’s founder Maurice “Hank” Greenberg still had $49.6 million of his $1.25 billion in September according to the New York Times.

Despite being ousted as AIG Chairmen and CEO three years ago by the Sheriff of Wall Street, Eliot Spitzer, when he was still Sheriff.

And speaking of landing on your feet, AIG also has something in common with outgoing US Vice President Dick Cheney.

The way it shows gratitude.

After dodging a bullet, AIG’s Sebastian Preil, Jeffrey Malkovsky, John Roberts and friends made French red leg partridges dodge bullets on an $86,000 hunting trip outside of Salisbury, Wiltshire, England in October.

“The recession will go on until about 2011 but the shooting was great today and we are relaxing fine,” the UK site News of the World quotes AIG Frankfurt manager Sebastian Preil quipping as he pulverized partridges at the Stoke Drove shoot. “We have been given $85 billion from the US bank to help us out but we should be on an even keel in two years.”

“It has been a fantastic day,” concurred Hilary James, the general manager of New York’s Bristol Plaza Hotel described by News of the World reporters as a “boisterous lady in her late 40s from Wiltshire [who] was more interested in talking about the birds she’d killed than the economic crisis.”

“We got plenty of shooting in as the weather was fine. We love it here,” she said.

Dick Cheney displayed similar thank-you-and-pass-the-ammo, bloodbath gratitude on the day he and George Bush were re-elected in 2004, commandeering Air Force Two to the Pierre, SD airport for a victory pheasant hunt even before John Kerry and John Edwards’ concession speeches.

Though Dick Cheney hunting jokes had not started yet–the Veep shot hunting buddy Harry Whittington in Kenedy County, TX in 2006 — Cheney shot 70 pen-raised pheasants, at Rolling Rock Club in Ligonier Township, PA in 2003 just one year earlier according to club employees.

Unfortunately, Cheney’s defibrillator machismo which brought us the war in Iraq failed him while shooting upland foes and he was rushed to George Washington Medical Center where he was hospitalized for shortness of breath.

“Sorry we ruined your Saturday,” the Veep’s wife Lynne Cheney told reporters at the hospital where Jay Leno used to joke Cheney had a reserved parking space. Cheney was going to be fine and he got plenty of shooting in, she said.

She could have been speaking about AIG.

Martha Rosenberg is a columnist/cartoonist who writes about public health. Her latest book is Big Food, Big Pharma, Big Lies (2023). Her first book was Born with a Junk Food Deficiency: How Flaks, Quacks and Hacks Pimp the Public Health. She can be reached at: Read other articles by Martha.

3 comments on this article so far ...

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  1. david said on November 12th, 2008 at 1:24pm #

    My personal experience with AIG was a bid from them on auto insurance for which I had been paying $400 a year. They came in with a bid of $1,200 for a year. It showed me what a bunch of crooks they are. And even after I told them that they still peatered me with e-mail.They are just as rotten as Enron

  2. Jim D said on November 12th, 2008 at 8:54pm #

    I like your article, but one little fact you have incorrect. It may be ticky-tack to most, but Dennis Kozlowski is not in a “Club Fed.” He is doing his time in a State Prison, which from the people I know in the “Corrections” business, is the worst place for a person to be. And unlike the others listed, Tyco never went out of business and was doing quite well when Dennis resigned and in still doing well. 8 1/3 to 25 for a “Pay Dispute.” That is just ridiculous!

  3. mary said on November 13th, 2008 at 8:53am #

    Martha: I was looking back through your ‘previous’ on DV and you have written some good stuff including this in August 2007 which was prescient.

    Ref this latest, one of my brothers lives near Salisbury here in the UK and I asked him if he knew of the shooting outfit and the pulverising of pheasants that you mention. He said:

    “The shoot is just North East of Broadchalke a couple of miles out of Salisbury up the Chalke Valley. One of my circular cycling routes takes me past Manor Farm just the other side of Broadchalke (Fyfield Bavant). On Mondays at lunchtimes I go past the farm and outside a small “meeting room/hall ” all the shooting types are hanging around waiting to be fed by the farmer’s wife and others. Affluent bunch in their BMW 4 x 4’s . Could this be them ? Pretty sure this is it.

    Did beating on an estate just once many years ago just to see what went on. A lousy pastime if you can call it that.”

    It looks like a relic of our feudal past and seems to be the haunt of our City boys (or was now that they’re reined in a little) and their friends.