AIG’s current ad campaign — the one in which employees thank the American public for its assistance, point out that the money has been repaid with a profit for taxpayers and tout some good things the company is doing these days — wasn’t especially credible even before it became known that the company might join a lawsuit against the federal government.
Rather, the ad called to mind BP ads that talk up the company’s contributions to the Gulf Coast and all but ignore the devastation its oil spill caused. As for AIG, its gratitude for the massive bailout in 2008 that kept it from collapse because of massive losses on mortgage-backed securities and other toxic assets doesn’t extend beyond the smiling faces in its TV ads.
AIG’s board of directors is to consider several options today and announce a decision by the end of the month. The lawsuit, filed more than a year ago by another investment firm on behalf of AIG shareholders, seeks $25 billion.
We hope AIG board members recognize that without the government and taxpayers, their company would have gone bankrupt. When AIG went to the government for assistance in September 2008 — the day after Lehman Brothers went bankrupt — AIG was out of options. It could not get money anywhere else. That company officials wanted a better deal than the government offered only underscores their conceit.
AIG’s reckless operations did more than jeopardize the company and betray shareholders, they compromised the entire financial system. The $182 billion rescue package extended to AIG was the largest of any of the Wall Street bailouts. While some sympathy for its shareholders is reasonable — AIG misled them — the suggestion that the government didn’t provide them adequate compensation in the bailout is not. Risks, including the risk that a company might fail, are inherent in the investments shareholders make.
As for AIG’s gall, Reps. Peter Welch of Vermont and Michael Capuano of Massachusetts put it well in describing the company as the “poster child” for Wall Street greed and mismanagement. In a letter to AIG Chairman Robert Miller, the two say, “Now, AIG apparently seeks to become the poster company for corporate ingratitude and chutzpah.”
Added Massachusetts Sen. Elizabeth Warren: “Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn’t generous enough…”
We agree; $182 billion is more than enough corporate welfare for one company.