June 24, 2009 2:01 PM
- Text
Why AIG Stumbled, And Taxpayers Now Own It
Since Liddy took over, he says the troubled, volatile entity has disposed of half of its complex derivative investments, but another 27,000 deals valued at $1.5 trillion are still on the books.
"We spoke to someone who's intimately familiar with AIG Financial Products. And he told us that out of the 10 or 20 people who were really involved in the decision-making process, only two have left the company. That everybody else is still there. Is that true?" Kroft asked Liddy.
"Steve, we've had some resignations," Liddy replied. "We've had some people who have said 'I'm going to resign, I'm not going to give you my resignation now, because I want to do this professionally and I want to help you.'"
Asked if it is true that only two people have left, Liddy said, "To the extent there are people who traded credit default swaps, some of them may still be there, because we're asking them to un-trade them But the people who designed it, who built those models, who signed us up for that business, they are gone."
"Retired, comfortably retired," Kroft remarked.
"Retired, left, went and did other things," Liddy said.
60 Minutes asked to speak with some of the employees of AIG FP and visit their offices in Wilton, Conn.
Liddy declined, but provided us with a video of the operation. He said people there were still traumatized from the threats and harassment leveled against them during the recent bonus controversy, and no one wanted to talk to us.
"Busloads of people wound up on their lawns, taking pictures, picketing in front of their houses. Just not a good idea for us to get back into that," Liddy explained.
Liddy believes the public anger directed against the company and its employees is misguided and counterproductive, making it more difficult to hold onto the people it needs to keep the company going, and undermining the value of its most successful and profitable assets which he is trying to sell.
Just this week, the company unloaded its Tokyo office building for $1.2 billon. The AIG brand - once a huge asset - is quickly vanishing. Even the iconic Manhattan headquarters is up for sale.
"So you are, in effect, the liquidator?" Kroft asked.
"Well, I don't think it will be called AIG, but there will be pieces of this institution left. But that's the only choice we have. That's the only way we can pay back the government," Liddy said.
Asked if all of the government money will be paid back, Liddy said, "That's what we're committed to doing."
"He's got a very tough job ahead of him," Richard Ferlauto told Kroft. "I don't envy him at all."
"You seem to be saying that AIG is still not out of the woods," Kroft remarked.
"If the economy deteriorates anymore, I think there are more problems out there," Ferlauto said.
"We're not an island," Liddy told Kroft. "We're very much dependent upon what happens in the overall economy and the overall financial marketplace. But we have a plan that we'll execute over the next couple of years that we think has an excellent chance of repaying the federal government."
Produced by Andy Court and Keith Sharman
Copyright 2009 CBS. All rights reserved. "We spoke to someone who's intimately familiar with AIG Financial Products. And he told us that out of the 10 or 20 people who were really involved in the decision-making process, only two have left the company. That everybody else is still there. Is that true?" Kroft asked Liddy.
"Steve, we've had some resignations," Liddy replied. "We've had some people who have said 'I'm going to resign, I'm not going to give you my resignation now, because I want to do this professionally and I want to help you.'"
Asked if it is true that only two people have left, Liddy said, "To the extent there are people who traded credit default swaps, some of them may still be there, because we're asking them to un-trade them But the people who designed it, who built those models, who signed us up for that business, they are gone."
"Retired, comfortably retired," Kroft remarked.
"Retired, left, went and did other things," Liddy said.
60 Minutes asked to speak with some of the employees of AIG FP and visit their offices in Wilton, Conn.
Liddy declined, but provided us with a video of the operation. He said people there were still traumatized from the threats and harassment leveled against them during the recent bonus controversy, and no one wanted to talk to us.
"Busloads of people wound up on their lawns, taking pictures, picketing in front of their houses. Just not a good idea for us to get back into that," Liddy explained.
Liddy believes the public anger directed against the company and its employees is misguided and counterproductive, making it more difficult to hold onto the people it needs to keep the company going, and undermining the value of its most successful and profitable assets which he is trying to sell.
Just this week, the company unloaded its Tokyo office building for $1.2 billon. The AIG brand - once a huge asset - is quickly vanishing. Even the iconic Manhattan headquarters is up for sale.
"So you are, in effect, the liquidator?" Kroft asked.
"Well, I don't think it will be called AIG, but there will be pieces of this institution left. But that's the only choice we have. That's the only way we can pay back the government," Liddy said.
Asked if all of the government money will be paid back, Liddy said, "That's what we're committed to doing."
"He's got a very tough job ahead of him," Richard Ferlauto told Kroft. "I don't envy him at all."
"You seem to be saying that AIG is still not out of the woods," Kroft remarked.
"If the economy deteriorates anymore, I think there are more problems out there," Ferlauto said.
"We're not an island," Liddy told Kroft. "We're very much dependent upon what happens in the overall economy and the overall financial marketplace. But we have a plan that we'll execute over the next couple of years that we think has an excellent chance of repaying the federal government."
Produced by Andy Court and Keith Sharman
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