Andrew Cuomo sues AIG to find out which banksters ended up with their bailout billions
Counterparties! Hurrah! Bloomberg:
New York Attorney General Andrew Cuomo subpoened American International Group Inc.’s credit- default swap data to see whether its customers including Goldman Sachs Group Inc., Societe Generale SA and Deutsche Bank AG were improperly compensated with taxpayer dollars.
“Our investigation into corporate bonuses has led us to an investigation of the credit-default swap contracts at AIG,” Cuomo said in a statement. “CDS contracts were at the heart of AIG’s meltdown. The question is whether the contracts are being wound down properly and efficiently or whether they have become a vehicle for funneling billions in taxpayer dollars to capitalize banks all over the world.”
How can transparency be a bad thing?
I mean, unless you don't want to be held accountable. More:
A person familiar with the New York state probe compared the winding down of AIG’s contracts with those of a company such as Lehman Brothers Holdings Inc., where a firm in distress doesn’t pay out 100 cents on the dollar. Lehman declared bankruptcy in September. On the other hand, AIG’s payouts appear to have been 100 cents on the dollar, the person said. Cuomo is also looking into the negotiations that led to the winding down of the contracts, the person said.
The person said there’s a possibility that AIG is becoming a portal through which the federal government is pouring money to capitalize banks in the U.S. and overseas.
AIG sold swaps to more than 20 U.S. and foreign banks. After the company was rescued by the U.S. from collapse last year, banks that bought credit-default swaps got $22.4 billion in collateral and $27.1 billion in payments to retire the contracts, the insurer said earlier this month. Goldman Sachs, Deutsche Bank and Societe Generale were among the largest recipients.
The letter from Cummings and 26 other members of Congress to Neil Barofsky, inspector general for the Troubled Asset Relief Program, asked whether holders received 100 cents on the dollar for their securities, a sum they wouldn’t be entitled to get unless their bonds actually defaulted.
Those $165 million bonus payments are looking more like hush money all the time, aren't they?