A.I.G.–the insurance giant which received $182 billion in government bailout money at the height of the 2008 financial crisis–announced late Wednesday that it will not sign on to a $25 billion lawsuit being filed against the government by the company’s former CEO.
News of the lawsuit provoked widespread outrage when The New York Times first reported A.I.G. was considering joining Maurice “Hank” Greenberg’s lawsuit accusing the New York Fed of being a “loan shark” that harmed AIG’s shareholders by charging an “exorbitant” 14.5% interest rate for its taxpayer-funded loan.
“It’s honestly hard to talk about this issue on television,” the Washington Post’s Ezra Klein said, “because you can’t curse and it’s hard to talk about it without using any of the seven words you can’t say.” Instead he called Greenberg “one of the worst villains of the financial crisis,” and his lawsuit an “appalling, appalling, disgusting, ridiculous affront to decency.”
Klein pointed out the absurdity of the suit, noting that the federal government was A.I.G.’s only option in securing a loan to prevent its bankruptcy. Newly-elected Sen. Elizabeth Warren (D-MA) was similarly outraged, releasing a statement saying, “AIG’s reckless bets nearly crashed our entire economy … A.I.G. should thank American taxpayers for their help, not bite the hand that fed them.”
News of the lawsuit couldn’t have come at a worse time for the company. It is currently airing TV commercials thanking Americans for rescuing it following its disastrous bets on mortgage-backed securities which threatened to derail the entire national economy.
Matthew Alexander