AIG Questioned on Billions in Bank Payouts

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The insurance giant AIG is facing new Congressional and legal scrutiny over how it funneled tens of billions of dollars in taxpayer bailout money to banks facing huge losses that AIG had insured. In what some have called the “backdoor bailout”, AIG gave nearly $13 billion to Goldman Sachs and tens of billions more to other firms including Bank of America, Merrill Lynch, JPMorgan Chase, Morgan Stanley and several foreign banks. On Thursday, twenty-six House Democrats signed a letter by Congressmember Elijah Cummings asking the bailout program’s inspector general to investigate the payments. Meanwhile New York State attorney general Andrew Cuomo subpoenaed AIG for information related to the derivatives payments funneled to the banks.

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