Last Updated Jan 4, 2010 12:59 PM EST
To encapsulate: when AIG got into trouble in September of 2008, former Allstate CEO Ed Liddy became CEO of AIG with a mandate to sell off the pieces of AIG's once trillion-dollar puzzle and pay back the money lent by the federal government. Then Liddy changed his tune and said it would take three to five years to sell off everything.
Liddy packed up and high-tailed it out in mid-2009, as did Paula Reynolds, the former CEO of Safeco, who had been in charge of divestitures at AIG. Last summer former MetLife CEO Robert Benmosche walked through the revolving AIG CEO door and halted what he described as "the fire sale of the century," indicating in recent interviews that while he might sell a few things, he wanted to keep AIG as a going concern.
In the interim what actually, if anything, has been sold? A building in Tokyo was sold, as was its 21st Century direct auto insurance unit which was bought by Farmers Group, a unit of Zurich. AIG also put its two Asian life insurance units, AIA and Alico, into special purpose vehicles with the idea of spinning them off to investors in public offerings. That was more plausible when AIG's stock price was $56 a share. It's now $30.
What's even more important is what hasn't happened, and why. For almost a year MetLife has reportedly been in negotiations to buy Alico. And now the Los Angeles Times reports that New York-based Allied Aviation Services, one of the nation's largest providers of jet fuel, has made a $12 billion offer for AIG's aircraft leasing unit, but AIG hasn't even responded.
If true, the story casts doubt not only on AIG and its management, but on AIG's overseers at the Treasury, people such as pay czar Ken Feinberg.
Yes, the offer comes with conditions. Allied Aviation needs a three-to-five year federal loan to complete the purchase, so in effect taxpayers would take money out of one pocket just to put it in the other. And yes, this is a low-ball price; the aircraft unit's portfolio of Boeing aircraft is worth $40 billion, says the LA Times.
But Allied Aviation President Robert Rose hints at another reason why AIG is unwilling to even respond: Steven Udvar-Hazy, an AIG insider and current boss of the unit, wants to buy at least some of it himself with the backing of well-connected private equity firms. Udvar-Hazy's current proposal, if it is legitimate, is far from lucrative because he wants 10 percent of the choice bits of the aircraft unit's portfolio for only $4 billion.
So is AIG's vaunted divestiture plan just a myth? Is the company - and the Treasury - being manipulated by insiders? And will the government and the taxpayers ever get their money back?
Either someone should provide answers, or as they say in the movie Jerry Maguire, "Show me the money."