A two-year investigation of the trillion dollars of credit default swaps AIGFP wrote -- the products that nearly bankrupted the world's once largest insurer and forced the U.S. Treasury to bail it out with $182 billion in taxpayer money -- has resulted in a waste of more taxpayers' dollars.
Here's the brief but painful summary. Cassano ran AIGFP out of London with virtually no U.S. regulation, but a mandate to make money. And he did -- until the subprime mortgage crisis. The once lucrative insurance AIGFP wrote to cover these loans, which weren't supposed to default, turned out to be time bombs. Those that saw the implosion coming, including investment bank Goldman Sachs, had AIGFP insure billions of their shaky loans.
When the U.S. government paid off AIG's debts on the grounds that the financial system would have otherwise failed, the banks were off the hook and AIGFP executives walked away with big bonuses. No one made out better on the misfortune of others than Cassano, who, although no longer employed after the 2008 debacle, still received his $35 million bonus, in addition to the $280 million he'd earned over an eight year period.
During congressional hearings, everyone, including New York Attorney General Andrew Cuomo, weighed in. It all proved to be sound and fury, signifying nothing. Some AIGFP employees did give back a few million, and now wear a federally mandated salary collar around their necks.
But Cassano didn't give back anything. And it now appears he won't have to. Being bullheaded and stupid -- exactly how his underlings describe him in a recent Vanity Fair article -- isn't illegal.
Someday he may write a book telling his side of the story. Or he may hire out as a consultant on how to avoid a financial crisis. Either way, his future, unlike that of so many others, is secure.