Greenberg: AIG bailout has failed

Former AIG CEO Maurice “Hank” Greenberg says the bailout has "failed" and he's proposing a 10-point alternative focused on saving, not breaking apart, the mega-insurer.

Greenberg will reveal his plan during a hearing before the House Oversight and Government Reform Committee today, slated to start at 10 a.m.

His proposal includes pressuring the counterparties at the other end of AIG’s toxic financial transactions to reinvest in AIG some of the $100 billion in taxpayer money they received as part of the firm’s bailout, according to a copy of Greenberg’s prepared testimony obtained by POLITICO.

Critics have blasted the feds for not forcing AIG counterparties to take a loss on the complex financial contracts, but rather allowed them to be paid off in full. Particularly galling for some is the fact AIG paid out billions of U.S. taxpayer money to Europe’s largest banks.

“The plan has also been highly controversial and in some respects downright puzzling,” Greenberg says of the counterparty payments.

But Greenberg’s mere appearance before the committee is controversial, too.

He was forced out of AIG in 2005 in the wake of an accounting scandal. The house oversight panel’s top Republican, Rep. Darrell E. Issa of California, Wednesday asked Chairman Edolphus Towns (D-N.Y.) to reconsider allowing Greenberg to testify, raising concerns about the witness’ credibility given he’s at the center of several lawsuits, including charges securities fraud charges by a U.S. Attorney.

(Excerpt) Read more at politico.com ...