AIG May Never Fully Pay Back U.S.

Congressional Report Says Company Is Making Progress, But Long-Term Success Remains Uncertain

(AP)  Despite some progress, congressional investigators on Monday cast doubt on whether efforts by American International Group Inc. to restructure its operations and pay back the government will ever prove successful.

Still, the company's shares jumped about 15 percent after the head of the House Committee on Oversight and Government Reform said that panel will examine a plan to reduce the AIG bailout package.

In the biggest taxpayer-funded bailout of a single company, the Federal Reserve and Treasury Department have provided $182.3 billion to the insurance giant. The Government Accountability Office said that as of early September, AIG's outstanding balance of aid was $120.7 billion.

The GAO found "some progress in AIG's ability to repay the federal assistance." But improvement in the company's stability depends on its long-term health, market conditions and continued government support.

The report concluded that "the ultimate success of AIG's restructuring and repayment efforts remains uncertain."

Responding to the report, AIG spokesman Mark Herr said: "AIG remains committed to reducing risk and repaying taxpayers."

Fearing that AIG's collapse could take down the entire U.S. financial system and the broader economy, the Fed first came to AIG's rescue last September.

The original $85 billion aid package came one day after Lehman Brothers filed for bankruptcy, the largest in U.S. corporate history. AIG burned through the first lifeline, though, and continued to hemorrhage cash. It needed help three more times from the government, which owns about 80 percent of the company because of the bailout.

Congressional investigators acknowledged that the federal assistance has "helped stabilize AIG's financial situation." But they said the government remains exposed credit and investment risks that "could result in the Federal Reserve and Treasury not being repaid in full."

Rep. Edolphus Towns, chairman of the House Oversight Committee, will have that panel study a plan by AIG's former CEO Maurice "Hank" Greenberg to reduce and restructure the company's bailout package, a committee spokeswoman said Monday.

Towns, who has not spoken to the Treasury Department about the plan, met with Greenberg last week, the spokeswoman said.

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Greenberg was ousted as CEO in 2005 amid an accounting scandal. He still holds millions of shares of AIG stock through a privately held investment company called CV Starr & Co.

Standard & Poor's equity analyst Catherine Seifert upgraded her rating on AIG's stock to "Hold" from "Sell" Monday, saying Towns' review of Greenberg's plan should boost the insurer's stock price in the near term.

Seifert raised her price target on the stock to $45 from $30.

AIG shares have been extremely volatile in recent months as investors bet on whether the New York-based company will be able to pay off its government debts and fully recover from the economic downturn. Its shares surged $5.79, or 14.5 percent, to $45.70 in afternoon trading.

[wardogos]

When Father Rode the Goat

The house is full of arcana, and mystery profound;
We do not dare to run about or make the slightest sound.

We leave the big piano shut and do not strike a note;
the doctor's been here seven times since father rode the goat.

He joined the lodge a week ago; Got in at 4:00 a.m. ----
And sixteen brethren brought him home, though he says that he brought them.

His wrist was sprained and one big rip had rent his Sunday coat ----
There must have been a lively time when father rode the goat.

He's resting on the couch today! And practicing his signs ----
The hailing signal, the working grip, and other monkeyshines;

He mutters passwords 'neath his breath, And other things he'll quote ----
They surely had an evening's work when father rode the goat.

He has a gorgeous uniform, all gold and red and blue ----
A hat with plumes and yellow braid, And golden badges too.

But, somehow, when we mention it, he wears a look so grim;
we wonder if he rode the goat ---- or if the goat rode him!

[reality42]

I think the American people should not have to pay back all of there morgages if AIG gets this break.
What a joke the world thinks about the USSA

[truth-b-toll]

Never? Wait a minute thats a LONG time!
Let's tax them for a little while...
Oh wait I forgot if you tac the rich then the poor will suffer!
WHAT was I thinking?
Let's just not tax the Rich bankers, the oil companies, we wouldn't want to "hurt the poor"

[pw08-2009]

Is anyone surprised? Thanks U.S. government for looking out for your citizens.

[quapawsix]

More like AIG got the Gold mine and the tax payers got the shaft.

[all_father]

Leave it to the U.S. Govt to "buy" into a loser company... using taxpayer money... which was never intended to be repaid in the first place. As usual, the chosen few make off like bandits while the American taxpayer gets the shaft.

[enwr77]

And it is ok if they do not pay back money but, a poor uninsured individual who goes to the emergency room and cannot pay they bill is the reason for the country's financial problems. This poor individual caused the high price in someone's plastic surgery. Therefore there should be a mandate for health insurance. Why was there no mandate to pay back bailouts/TARP given to corporations, companies, banks, etc?

[stn_sage]

First, I agree with 'Stuart', they never should have been bailed out to begin with! The 'too big to fail' is ONLY a rationale, and should be
DROPPED as a functioning policy!

Second, I agree with cs4466, there should be NO BONUSES to anyone at that company! Period.

Third, why is it that Mr. Greenberg retains shares in AIG when he was OUSTED as head over an accounting scandal?! THIS, is total B.S.!!
Any shares this man has left in AIG should be confiscated and put toward the owed debt, on the basis of his non-performance!

Once again, we see how certain 'white collar' businessmen are above the law!

[cs4466]

"AIG May Never Fully Pay Back U.S."

Then we need to make sure that AIG gives out NO bonuses to ANYONE for ANY REASON until they meet their obligation. Or fail. Whichever comes first.

[stuart-johns]

I know they owe us money, but they never should have bailed out to begin with. I hate this too big too fail notion. Even if they never pay the taxpayers back, I still wish they would fail - go out of business.