Liveblog: AIG - Where is the taxpayer's money going?

By Kayleigh Harvey - Talk Radio News Service


Talk Radio News Service will be liveblogging the House Oversight and Government Reform Committee hearing with AIG CEO Edward Liddy today at 10:00. Refresh this page for updates.

AIG Chairman and CEO, Edward Liddy, will come before Congress today for the second time since it was revealed, in March, that AIG paid out $120 million in bonuses after receiving a $85 billion from the government bailout package.

Chairman of the Committee Edolphus Towns (D-N.Y.) said, "Eight months ago, the American taxpayer came to the rescue of AIG with an $85 billion bailout. That was followed by more money in November, more again in December and more money still in March. The taxpayers have now provided more than $180 billion in financial assistance to AIG.

"A few days ago, we learned that the aIG has put together a plan called Project Destiny. Project Destiny is described as "a multi-year roadmap for the restructuring of AIG. I requested a copy of this plan, but AIG says that disclosing the plan "would undermine its efforts to achieve its goals for the benefit of American taxpayers." AIG says it is consulting on the issue with the New York Fed. In other words, "trust us." Everything will be alright."

Adding, "I was surprised and disappointed to see that AIG continues to argue for secrecy. In his testimony, Mr. Liddy seems to argue that criticism of AIG will somehow hurt the company. Again we are hearing, "Trust us." But we are not willing to let $180 billion go just on trust. We will questions, we will inquire, we will verify, and we will not hesitate to probe every aspect of AIG management and operations to protect the taxpayer's investment."

Ranking Member, Darrell Issa (R-Calif.) said, "I want to acknowledge that none of this is the trustees' fault, they are simply operating within the organization that was created by others, and no doubt do so out of patriotic spirit of public service."

Adding, "The American people have a right to know what is being done with their money."

In his opening testimony Edward Liddy said, "We are working hard to determine the destiny of the component parts of AIG."

Adding, "We intend for taxpayers to realize the fullest possible value from every asset disposition, and we intend that every company that emerges at the end of restructuring will be strong, transparent, and a credit to all its owners.

In particular, we are transferring two major foreign life insurance companies - ALICO and AIA - into special purpose vehicles in exchange for a substantial reduction in AIG's debt to the Federal Reserve Bank of New York. We expect to complete the contractual arrangements for these in the near future."

Liddy added, "We recognize our responsibility to work hand in hand with the government to preserve that value, and I assure you that is our goal. We continue to welcome a frank and open dialogue with Congress on our progress in restructuring, so that you can be in a position to support our efforts. That is essential and I will help us to preserve the value of AIG franchise for the benefit of AIG's stakeholders, the American taxpayer most of all."

Asked by Towns, "Can you confirm that AIG will not require any other additional government money?"

Liddy, "What I can say is we will do our best not to require any additional funding...that answer is very dependent on what happens around the financial globe...I can't give you a guarantee on that. I can't control what happens in the global market."

Towns asked Liddy to provide a copy of 'Project Destiny' by the end of the day.

Liddy responded by saying, "I will do my best."

Liddy will consult with AIG lawyers on this issue as he fears that releasing details of 'Project Destiny' could provide access to marketing information to their competitors and then impact AIG's ability to pay back taxpayers money."

Towns closed by saying, "Do you honestly believe you have a right to prevent Congress from reviewing how the taxpayers money is being spent?"

Frustrated at Liddy's response that he would need to talk to his counsel before providing Congress with details on 'Project Destiny,' Issa gave Mr. Liddy a chance to talk to his attorney sitting behind him.

After conversing for less than two minutes, Mr. Liddy concluded that it there would be limitations to what can be provided as there is "commercially sensitive" information in the plans that AIG would not want competitors to see.

Congressman Paul Kanjorski (D-Penn.) said, "Do you have any opinion whether it would be helpful...if in someway we developed a Federal Insurance charter?"

Liddy replied, "There needs to be someone that looks at systemic risks."

Congressman Brian Bilbray (R-Calif.), "Are you hoping to be able to pay back the taxpayer before the ceiling falls in....How long will it take to pay the taxpayers back?"

Liddy replied, "Somewhere between three and five years. What makes the answer so difficult is how strong will the economy be worldwide and how strong will the financial markets be worldwide."

Bilbray added, "When will you start repaying debt?"

Liddy replied, "As soon as possible....hopefully in a matter of months assuming we get all the Federal approval. "

Congressman Elijah Cummings (D-Md.) asked, "What can you tell them [people who have lost jobs and homes] about what they can expect to see as they see foreclosures signs in front of their houses and businesses?

AIG is looking at its contracts to ensure bonuses are paid on performance basis. Liddy said, "If there are bonuses you earn them."

Congressman Jeff Fortenberry (R-Neb.) asked Liddy to explain to the public what exactly AIG is.

Listing several branches, Liddy said, "It's an insurance company with a few exceptions."

Liddy told the committee, "My time today is focused on today and tomorrow and less on yesterday."

Fortenberry asked Liddy about new figures on AIG bonuses differing from those provided to Congress in March.

It has now been revealed that AIG paid $454 million to bonuses in to its employees in 2008, compared to the $120 million figure released in March.

Apologizing for any confusion on how much was paid exactly for bonuses. Liddy said, the discrepancy on the amount occurred when they were asked by Congress about different type of bonuses, specifically cooperate bonuses.

Appearing frustrated and angry at Liddy's responses throughout the hearing, Congressman Dennis Kucinich (D-Ohio), told Liddy that AIG's behavior was "unacceptable." Adding, "You cheated people who saved lives, who save our children, what are you going to do about this?"

Liddy said he would work with Congress and offered to meet with Kucinich after the hearing.

Kucinich told Liddy that until this matter is resolved "Congress is not going to let you go," shouting that this was "unacceptable" behavior. He told Liddy that Congress "will keep calling you back here," until this issue was concluded.

Kucinich agreed to meet with Liddy following the hearing.

Congressman Jeff Flake (R-Ariz.) asked Liddy, "Can you tell us what the administration's plans are with moving forward with AIG?"

Liddy said, "I cannot."

Congressman William Clay (D-Mo.) asked, "Is AIG really too bog to fail and has it already failed?"

Liddy said, "I would point out to you that this quarter's figures showed that losses for this quarter were not 62 billion...it was 4.3 billion, substantially less than it was in the first quarter of 2008. It's a very complicated institution. It's a very complicated operation."

Hearing was suspended until 12.15pm as Congress was called to vote.

Congressman Stephen Lynch (D-Mass.) said he was “disappointed” with Mr. Liddy as he failed to address the question both in this written and oral testimony, relating to where the taxpayer’s money is going. Lynch said, “It’s a new ball game. One of transparency and accountability.”

Liddy replied, "The last time I was here we provided a very exhaustive document that explained where all the taxpayers money has gone...it was a very exhaustive analysis that explains that in some detail. I thought we had already answered that."

Lynch said, "We are going to have to have you back up this. I am with Kucinich on this. We will not be rolled on this. When we call you up here and ask you a question, we want you to answer the question. "

Congressman Gerry Connolly (D-Va.) asked, “With respects to the bonuses, how many people left the company?

Liddy said, “On the FP sector we had about maybe 10 to 12 to maybe 15 resignations...don’t know if the resignations are over yet.”

Congressman Lynn Westmoreland (R-Ga.) asked Mr. Liddy to get and provide Congress with the number of lawsuits AIG are facing and to find out whether news reports on binding arbitration are true.

Congresswoman Marcy Kaptur (D-Ohio) asked, “Have you paid the taxpayers back any of the money they have lent you to date?”

Liddy responded, “Yes.”

Kaptur: “How much?”

Liddy: “Several billion dollars”

Kaptur: “Several Billion?”

Liddy: “Yes”

Kaptur asked for a list of dates, sums to be submitted for the record. Liddy agreed.

Kaptur then questioned Liddy about his connections with Goldman Sachs which revealed that Mr. Liddy has shares to the market value of $3 million from Golden Sachs.

Congressman Michael Turner (R-Ohio) wants to work with AIG and Mr. Liddy to look at how to improve mortgage back loan to value ratios. Turner fears that if this is not addressed then, "I believe that what we are going the see is the largest theft or fraud in history."

Congresswoman Jackie Speier (D-Calif.) told Liddy, “We are all scratching our heads how can you possibly pay back the taxpayers?”

Liddy said, “It is possible...as I said you before it depends on market circumstances.”

Kucinich said, "Is it true that even if the United States took over AIG 100 per cent these bonuses would still be awarded?"

“No. We have been looking at how we keep people spirited but how we keep in line with Federal regulations.”

Kucinich read a letter sent to employees which asked them to keep bonuses confidential. Kucinich asked Liddy, to inform Congress about any future bonuses.

Towns asked Mr. Liddy to remember that the American public wants to know why a company that contributed to our current economic crisis paid out bonuses that rewarded failure.

Kaptur asked anyone in the committee room currently under contract with AIG to stand - 6 people stood. Kaptur has asked for the details of their contracts.

Kaptur continues to probe into Liddy's connections with Goldman Sachs. Asking the committee to obtain minutes from meetings Liddy attended.

Issa told Liddy, "Please do not think you will not be back before us if you cannot answer...what have the American taxpayers bought for $190 billion dollars?"

Adding, "Provide us with some understanding on how you will pay us back."

Liddy said, "Assets values should be sufficient to satisfy all of what the company owes."

Congresswoman Carolyn Maloney (D-N.Y.) asked, "Whether the life insurance sector of AIG needed a bailout?"

Liddy said, "The life insurance sector was solvent."

Maloney asked, "Do you foresee that in the future that youl will not need any additional public money?

Liddy sighed saying, "Again, I would say that I certainly hope so."

Towns in closing told Liddy that he needed to understand that the "American taxpayer is frustrated."

Edward Liddy was able to leave the hearing at 1.36pm.

Helping Prisoners Re-enter The Community Successfully

By Kayleigh Harvey - Talk Radio News Service

The House Appropriations Committee held a Commerce, Justice and Science Subcommittee hearing today on “What Works for Successful Prisoner Re-entry.”

Speaking before the committee were Representative Danny Davis (D-Ill), Professor James Byrne, Department of Criminal Justice and Criminology at University of Massachusetts, Lowell and Jeremy Travis, President of the John Jay College of Criminal Justice.

Chairman Alan Mollohan (D-WV) said: “It’s becoming more and more apparent that effective reentry programs are the key to reducing recidivism and the strains on our communities and prison resources associated with recidivism.”

Congressman Frank Wolf (R-VA) asked the witnesses whether there was “any other country that is doing something really great, that we’re not aware of?”

Professor Byrne suggested looking at the model used in the Republic of Ireland. “I went to a prison in Dublin last year...I was amazed by the work programs...there was 320 people in the prison and every one of them had work and a job, they had a job training program there. The first thing I noticed was the one to one ratio of inmates to guards, I was shocked at that.”

Mr. Travis expanded on this point stating: “America stand apart from the rest of the Western world, worse, in terms of our levels of incarceration, how we treat people while they are in prison and the approach to reintegration.” Mr. Travis suggested that America look at reintegration strategies used in the United Kingdom and Germany.

Congressman Davis said: “Half the people in prison are due to drug related crimes.”

Talking about what should be done now Mr. Travis said: “We don’t link drug treatment, we should make sure that people who have drug addiction and are coming back home, that they go to the head of the list rather than the back of the list for drug treatment. Why do we send someone home and tell them to wait five months for drug treatment, when we knew what date they were coming out and could have planned it so they’d have the continuity at this high risk period.”

Punishing the Pirates

By Kayleigh Harvey - Talk Radio News Service

When you think of pirates you may think of the man with the wooden leg, an eye patch and the parrot on his shoulder. Today, in the 21st century, although pirates may dress differently than their stereotypical model, the crime of piracy on the sea is still an issue.

The U.S. House Armed Services Committee today heard testimony from Vice Admiral William Gortney, Acting Principal Director of the Office of African Affairs for the U.S. Department of Defense, Daniel Pike, Ambassador Stephen Mull, Acting under Secretary for International Security and Arms Control for the U.S. State Department and Karl Wycoff, Acting Deputy Assistant Secretary for African Affairs for the U.S. State Department on combating piracy on the high seas.

Committee Chairman Ike Skelton (D-Mo) said in his opening statement: “Recent events in the Gulf of Aden and off the coast of Somalia, however, make this very much a current and important issue for American national security.”

The hearing focused on how to tackle piracy and how to best reprimand those who are caught committing this offense on the seas.

Vice Admiral Gortney told the committee that “no-one is immune”. He said that pirates generally look for a “15-minute window of opportunity,” tackling “low and slow ships by pulling up alongside them”. Gortney added that these boats are hard to detect as “they look like fishing vessels.” The committee heard that piracy crimes are generally committed in the morning and as a result, “any ship less than three feet away, particularly in the morning, is treated as a suspected pirate ship,” he said.

Vice Admiral Gortney also stated that the failure to counter piracy threats was not the result of failed training. He said that measures were being taken in order to protect ships on the seas, such as “barbed-wire, look-out post and security patrols.”

Congressman Gene Taylor (D-Missi) asked Ambassador Mull whether a ship, targeted by pirates, baring the American flag, would be treated as committing an attack against America. Mull’s response was inconclusive, and Congressman Taylor and Chairman Skelton have asked the Ambassador to submit a written statement outlining in detail, to the committee how this crime is dealt with under international and domestic law.

Piracy is an issue being tackled by all nation states and the Combined Maritime Forces have established the Maritime Security Patrol Area in the Gulf of Aden to combine a united front to tackle piracy crime at sea.

Markey : “This Country has sent so much red, white and blue CO2 into the atmosphere”

By Kayleigh Harvey - Talk Radio News Service

Chairman of the House Energy and Commerce Committee, Henry Waxman (D-CA), Congressman Edward Markey (D-MA) met with British Secretary of State Ed Milliband MP and Danish Minister for Environment, Connie Hedegaard today to discuss how to tackle environmental issues globally.

The meeting was the start of the new administrations environmental talks leading up to the “Climate Conference in Copenhagen” in December 2009.

In 2012 the Kyoto Protocol to prevent climate changes and global warming runs out. New targets will be set at the Copenhagen Conference.

Talking about America’s role, in the need for saving the environment, Chairman Waxman said: “The United States has to catch up and become a leader.”

Congressman Markey commented on the need to tackle the levels of CO2 emissions created from the United States. He said: “this country has sent so much red, white and blue, CO2 into the atmosphere....we need to fix this.”

Finding the dialogues throughout the day productive, Danish Minister Hedegaard stated: “We cannot tackle the global challenges like climate change without the United States...we have set ourselves an ambitious timeline and we must live up to it...a lot is at stake and it is important for the whole world to come together.”

Adding to these comments British Secretary of State Ed Milliband said: “Obama has shown in the economic stimulus and in his vision around the country that environmental issues are important...that despite the challenges we face, we can get an agreement globally.”

Chairman Waxman concluded with the statement that he hoped to pass legislation in December that will tackle energy independence, climate change and global warming.

Obama Administration Needs To Work With Latin America

By Kayleigh Harvey - Talk Radio News Service

Sergio Bendixen, President of Bendixen and Associates; Dr Cynthia McClintock, Professor of political science and international affairs, and director of the Latin America and Hemispheric Studies Program at George Washington University, Eric Farnsworth, Vice-president of the Council of Americas and Ray Walser, senior policy analyst for Latin America in The Heritage Foundation's Douglas and Sarah Allison Center for Foreign Policy studies, gave testimonies today before the Subcommittee on the Western Hemisphere.

The witnesses created a lot of attention, with people lining up outside to hear the testimonies on "U.S. Policy Toward Latin America in 2009 and Beyond".

Congressman Gregory Meeks (D-NY), said: "You can tell by the way the room is filled today the interest in the Western Hemisphere".

Subcommittee Chairman Eliot Engel (D-NY) opened the hearing by welcoming Congressman Connie Mack (R-FL) as the committee's new Ranking Member and then outlined some positive steps he would like the Obama administration to pursue.

"First and foremost, I believe that President Obama's participation in April's Summit of the Americas in Trinidad and Tobago would send an extremely positive message to the heads of the state from Latin America, to the Caribbean. Second, as Chairman Berman moves forward with foreign aid reform and the Obama administration prepares its FY 2010 budget, it is essential that we increase funding for countries in the Western Hemisphere...Third, cooperation between the US and Brazil significantly expanded during the Bush Administration. This relationship needs to be further deepened under President Obama...Fourth, we must continue to support our friends in Mexico through the Merida Initiative...Fifth, I would urge President Obama to focus on Ecuador and Paraguay...and sixth, we must continue to support disaster recovery efforts in Haiti", Engel said.

Chairman Engel then went on to discuss the attacks in a synagogue in Caracus, Venezuela.

"On Monday, I sent a letter, along with 19 of my colleagues, to President Chavez urging him to end the bullying and harassment of the Jewish community in Venezuela and to extend the community the robust protection it deserves in light of the threats it faces. The Venezuelan government must quickly change its tune with regard to the country's Jewish community".

Dr McClintock said: "In Lationobarometer surveys between 2000 and 2005, approval ratings of the United States fell by more than 20 points in Ecuador, Chile, Brazil and Bolivia; more than 30 points in Mexico and Uruguay; and more than 40 points in Argentina, Paraguay, and Venezuela".

Ray Walser commented on America's dependence on the oil industry, with Congressman Ron Klein (D-FL) backing up his argument and stated that America needs to stop "buying oil from a country {Venezuela} that is hostile to our interests".

The committee also discussed the American economy and its ability to assist Latin American countries. Sergio Bendixen said: "We need to be realistic. Not only about what our friends want but what Latin America wants...we have economic limitations".

Other issues the committee discussed were the desires from the Obama administration, the April 2009 summit of the Americas in Trinidad and Tobago, human rights in Cuba, immigration, drugs control and free trade.

Eric Farnsworth suggested in his testimony that Brazil and Mexico should be allowed to join the G8. "Listening to Latin America is important...the rest of the hemisphere also has good ideas".

Chairman Engel said: "We cannot ignore our own backyard".

The committee hearing ended after 120 minutes as Congress was called to vote.