Greenberg: Obama Administration Threatened AIG Over Bailout Lawsuit

Former American International Group (AIG) CEO Hank Greenberg accused the Obama administration Wednesday of threatening the company not to join a class action lawsuit that he has brought against the federal government over the terms of the 2008 AIG bailout. Minutes of an AIG Board of Directors' meeting in January 2013 appear to support Greenberg's claim.

Frances Bivens, the lawyer who represents the U.S. Treasury in the case, warned AIG's board that if it joined the lawsuit, the company could face "another wave of congressional investigations" and public embarrassment.

Greenberg, who had left AIG by the time of the 2008 financial crisis but remained an AIG shareholder, has consistently argued against the federal bailout. He brought the lawsuit on behalf of shareholders who were shortchanged when the government forced AIG to accept what he argues were unfavorable terms. 

This week, a federal judge certified two classes of investors in the lawsuit, ruling that the case potentially involved "tens of thousands" of investors--including unions, pension funds, and individual investors. The suit seeks $50 billion in damages from the U.S. government, to be paid to AIG's shareholders at the time.

On Wednesday evening, Greenberg appeared on Neil Cavuto's show on the Fox Business Network to discuss the threats. He reminded Cavuto that "many people lost their life savings, including pension funds, including many AIG employees who worked for thirty-five, forty years to build the value of the company."

Greenberg tried to persuade AIG itself to join the lawsuit, but it declined to do so. The minutes of the AIG Board of Directors meeting on Jan. 9, 2013, confirm that AIG was threatened directly by the government.

The record in the minutes of Ms. Bivens's comments read, in part (pp. 61-62): 

The Board has asked some questions about legal fees, but frankly the legal fees are inconsequential compared to the substantial cost to the company in pursuing the claims. First, the government will be your adversary by signing onto the litigation, AIG will be terminated, the cooperative relationship that it had with the Department of Treasury and the New York Fed and will instead be positioning itself in direct opposition to those institutions. AIG will in fact be attacking the very institutions and the public servants that participated in the rescue.

A decision could also lead to another wave of congressional investigations, and AIG employees and AIG Board members could be called to testify before Congress and justify the decision to pursue a lawsuit asking the U.S. taxpayers to return billions of dollars to AIG. The public backlash and reputational risk of this lawsuit is also real. The lawsuit could very easily be perceived as "another example of corporate America thinking it doesn't have to play by the rules or that it can go back on its knees." [emphasis added]

Greenberg and the tens of thousands of affected shareholders would argue, contrary to Ms. Bivens's assertions, that it is the U.S. government that did not play by the rules of the constitution. What is extraordinary is that she would threaten congressional investigations as a consequence of AIG shareholders exercising their rights--a threat neither she nor the executive branch has any authority to make.


ON BREITBART TV

Report: Obama Treasury Dept Threatened AIG Over Lawsuit

advertisement

Breitbart Video Picks

advertisement

advertisement

Fox News National

advertisement

advertisement

Send A Tip

From Our Partners

Fox News Sports