Once again House congressional leaders are off target (both Democrats & Republicans).  Meet the mastermind behind the AIG unit that current AIG Chairman & CEO Liddy is getting bashed for.  Personally, I don’t see how a guy who worked along Milken of Drexel Burhnam Lambert who was arrested for fraud, be allowed to sell products and services without strong oversight and regulation.

Joseph J. Cassano and a over a couple of dozen staff from his AIG business division brought down the United States financial system and possibly the World.

BEHIND INSURER’S CRISIS, A BLIND EYE TO A WEB OF RISK

By GRETCHEN MORGENSON

The London Office

The insurance giant’s London unit was known as A.I.G. Financial Products, or A.I.G.F.P. It was run with almost complete autonomy, and with an iron hand, by Joseph J. Cassano, according to current and former A.I.G. employees.

A onetime executive with Drexel Burnham Lambert — the investment bank made famous in the 1980s by the junk bond king Michael R. Milken, who later pleaded guilty to six felony charges — Mr. Cassano helped start the London unit in 1987.

The unit became profitable enough that analysts considered Mr. Cassano a dark horse candidate to succeed Maurice R. Greenberg, the longtime chief executive who shaped A.I.G. in his own image until he was ousted amid an accounting scandal three years ago.

But last February, Mr. Cassano resigned after the London unit began bleeding money and auditors raised questions about how the unit valued its holdings. By Sept. 15, the unit’s troubles forced a major downgrade in A.I.G.’s debt rating, requiring the company to post roughly $15 billion in additional collateral — which then prompted the federal rescue.

Mr. Cassano, 53, lives in a handsome, three-story town house in the Knightsbridge neighborhood of London, just around the corner from Harrods department store on a quiet square with a private garden.

He did not respond to interview requests left at his home and with his lawyer. An A.I.G. spokesman also declined to comment.

See additional articles:  NY Times -

Behind Insurer’s Crisis, Blind Eye to a Web of Risk

Clearly AIG’s CEO, Board of Directors and its senior executives have no concept of reality.  The company is 80% owned by the US taxpayers and AIG runs like it’s their private golf club and spa.

• Former AIG CEO MauriceGreenberg spends $20 million of AIG money on US Chambers to lobby Congress for deregulation post Enron and turns AIG into an international hedge fund according to American Association for Justice case study.
• In 2008, over $112,000 of campaign contributionwas given to the Obama Presidential campaign by AIG employees according to OpenSecrets.org
• In 2008, over $73,000 of campaign contribution was given to Chris Dodd’s campaign by AIG employees according to OpenSecrets.org
• In 2008, over $44,000 of campaign contribution was given to Hillary Clinton’s campaign by AIG employees according to OpenSecrets.org
• Federal Reserve Bank in September of 2008 under Bernanke lends insolvent AIG $85 billion with White House and Treasury Secretary Paulson support.
• AIG has access to various other lending facility including $40 billion of TARP that brings the total to $165-175 billion as of March 2009
• In March 2009, Bernanke admits being frustrated by AIG problems as AIG reports $62 billion loss in most recent quarter of operations and over $100 billion in 2008 making it the worst lost in US Corporate history.
• AIG reveals $12.9 billion was paid to Goldman Sachs using Federal taxpayer money due to CDS obligations. Former Treasury Secretary Hank Paulson was the former CEO of Goldman Sachs.
• Bonus of $165 million is to be paid to AIG executives making 73 of its employees (past or present) of the business division responsible for massive financial losses instant millionaires. A total of $450 million is to be paid to various employees (past or present) for 2008 performance despite the company lack of financial viability.

• US job loss in 2008 is net 2.6 million
• US job loss in 2009 at 22,135 per day or 1.3 million as of end of Feb.
• Foreclosures nationwide are at all time high according to Sacramento, Calif.-based Foreclosures.com. The company said 121,756 foreclosures were completed nationwide in Feb ‘09, up from 72,694 in Jan and the previous high of 104,243 in Sep ‘08
• U.S. household wealth falls $11.2 trillion in 2008 according to Federal Reserve data.
• U.S. income is about $39,000 per capita in 2007

Wonder where insurance giant AIG spent the $170 billion bailout TARP money?

Credit Default Swaps:

Counterparty Amount Posted ($ bn)
Societe Generale $4.1
Deutsche Bank $2.6
Goldman Sachs $2.5
Merrill Lynch $1.8
Calyon $1.1
Barclays $0.9
UBS $0.8
DZ Bank $0.7
Wachovia $0.7
Rabobank $0.5
KFW $0.5
JPMorgan $0.4
Banco Santander $0.3
Danske $0.2
Reconstruction Finance Corp $0.2
HSBC Bank $0.2
Morgan Stanley $0.2
Bank of America $0.2
Bank of Montreal $0.2
Royal Bank of Scotland $0.2
Top 20 CDS Total $18.3
Other $4.1
Total Collateral Postings $22.4

In addition, despite bankrupting itself on risky practices with shareholder capital and on the verge of collapse until the US Federal Government stepped in with taxpayers money, AIG executives and Board of Directors compensated itself with huge bonuses, $165 million of taxpayers bailout money to be exact.