Eliot Spitzer identifies the “real disgrace at the insurance giant”
The focus on excessive bonuses paid out at AIG is “obscuring the real disgrace at the insurance giant,” writes former New York governor and Wall Street watchdog Eliot Spitzer on Slate.com. Spitzer notes the bailout provided a smokescreen to hide the payment of an enormous second round of cash to the same group that had received billions through the TARP program already. The double-dealing can be traced to last fall when the initial decision to bailout AIG was made by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke. They said they feared AIG’s inability to pay its counterparties could trigger a systematic failure. “And who were AIG’s trading partners?” Spitzer writes. “No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes.”