Eliot Spitzer on AIG

Wednesday, March 18, 2009

Former AIG insurance giant chief Maurice 'Hank' Greenberg was sued by then New York State Attorney General Eliot Spitzer, who accused AIG and Greenberg of cooking the firm's books to deceive regulators and investors. (AFP/Getty Images)

Former AIG insurance giant chief Maurice \'Hank\' Greenberg and then New York State Attorney General Eliot Spitzer. (AFP/Getty Images)

Eliot Spitzer, columnist for Slate and former governor of New York, talks to WNYC's Brian Lehrer about AIG bonuses, CEO compensation, the NYS budget, and other matters of the day.

Brian Lehrer: What put AIG in your sights as New York attorney general?

Eliot Spitzer: We were approached by some sources who said that AIG, which was at the time guided by Hank Greenberg as CEO, was, to speak in street vernacular, juicing its books by creating false reinsurance contracts that would appear to add capital to its balance sheet. Now that sounds all very complicated but, what it really means is they were playing games with their accounting in order to look stronger than they were. Hank Greenberg, there are tapes that prove this, was very, very concerned with any, even minor, fluctuation in their stock evaluation.

These contracts, it was alleged, were designed to make them look better in the eyes of Wall Street. We investigated, brought a civil case to settlement of $1.4 billion. At the time, $1.4 billion seemed like a lot of money. It was the biggest financial settlement ever. The board removed Hank Greenberg because he invoked the Fifth Amendment, when he was asked about this. Four people were charged criminally and convicted for basically playing games. But it lead us to inquire and to probe into the inner workings of the company and what we saw was a mess.

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The Takeaway

Andrew Ross Sorkin on why we should pay AIG bonuses

Tuesday, March 17, 2009

Outrage over the news that AIG employees will receive their enormous bonuses is widespread. Even President Obama suggested we simply tear up the bonus contracts and Iowa Senator Chuck Grassley suggested that the executives should consider doing the honorable thing a la seppuku. But not everyone thinks these bonuses are evil. One of those minority voices is Andrew Ross Sorkin, chief acquisitions and mergers correspondent for our partner, the New York Times, and he is here to make the case for the AIG bonuses.

For more, read Andrew Ross Sorkin's article, The Case for Paying Out Bonuses at A.I.G. in today's New York Times.


The Takeaway

Despite tied hands, President up in arms over AIG

Tuesday, March 17, 2009

As the lavish AIG executive bonuses continue to infuriate the nation, the Obama administration is swearing to step in. But due to existing contracts and the rule of law, their hands may be tied. So what's a President to do? The New York Times' Jackie Calmes joins us to discuss.

For more, read Jackie Calmes' and Edmund L. Andrew's article, Obama in Effort to Undo Bonuses Granted by A.I.G., in today's New York Times.

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