Dems Investigating Bush Administration Role In AIG Collapse
A House oversight panel is investigating the role Bush administration officials and regulators played in the collapse of American International Group. The first step of the investigation begins Thursday, House Oversight and Government Affairs Committee Chairman Ed Towns (D-N.Y.) tells the Huffington Post, when the committee hears testimony from former AIG CEO Hank Greenberg.
In November 2004, the Bush Justice Department and the Securities and Exchange Commission agreed not to prosecute AIG for allegedly helping companies fudge their books. In exchange, AIG agreed to host a government-appointed auditor in company meetings. At the time, Greenberg said it brought “finality to the claims raised by the SEC and the Department of Justice.”
Towns said that Greenberg should be able to identify Bush administration officials involved in the decision-making around the settlement. Towns added the committee wants to know what Bush administration regulators knew about AIG’s credit default swaps and other highly risky positions that brought the company down.
Asked if he would be directly pursuing Bush administration officials, Towns said: “No doubt about it. That’s the reason I want to talk to Greenberg first. He might even point some folks out. That’s of great interest to us.”
[ ]…The Bush administration’s preferred way of dealing with corporate scandal was to defer prosecution. The Wall Street Journal reported last week that Bush prosecutors made 103 deferred and nonprosecution agreements with U.S. companies between 2002 and 2009. While Clinton was president, meanwhile, only 11 such pacts were entered into.
