WASHINGTON–A House oversight committee has asked American International Group to provide it with extensive materials related to the activities of the company's troubled Financial Products group over the last two years.

The Friday letter from Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, to AIG Chairman Edward Liddy is part of the panel's continuing probe of why the company was forced to seek a federal bailout last month.

The letter follows up on issues discussed at the committee's Oct. 7 hearing on AIG, when it was revealed that the company ignored warnings of financial problems and even when it experienced huge losses continued to dole out millions in executive bonuses and other compensation as well as for lavish meeting events.

In the letter, Rep. Waxman asked for more data on events that AIG's operating units have held for its agents and brokers this year in addition to the week-long conference held at the posh St. Regis Resort in Monarch Beach, Calif., one week after AIG agreed to turn over 79.9 percent of its stock in return for loans of up to $85 billion from the Federal Reserve Board.

It also wants detailed data on bonus payments made to AIG executives and how AIG is using the money borrowed from the government under the bailout deal of Sept. 17.

“I ask that AIG provide the committee with a listing of all conferences, events, or retreats paid for by AIG, its subsidiaries, or affiliates from January 1, 2008, to the present, along with documents sufficient to show the charges paid for each conference, event, or retreat, including lodging, transportation, food, drink, and other charges,” the letter said.

“I also ask that you provide a listing of any similar conferences, events, or retreats planned for the next six months,” it added.

Regarding the London unit, Rep. Waxman asked for documents relating to the activities of the London-based AIG Financial Products unit that has resulted in AIG being forced to take write-downs of $25 billion.

Rep. Waxman said the committee wants information on the conference calls AIG corporate held weekly with officials in the London-based unit, as well as “all documents and communications” between the company and the people who ran the swaps unit during the last two years.

The people who ran the London unit included Joseph Cassano, its former president and, according to a Securities & Exchange filing, Doug Poling, executive vice president, chief administrative officer, secretary and general counsel of AIG FP, based in Wilton, Conn., home of their thrift. Pierre Micottis, executive vice president, market risk, of AIG FP, based in Paris, France.

Mr. Cassano was dismissed in February but received a $1 million monthly retainer from the company until AIG stopped the payments earlier this month under pressure from Congress and New York Attorney General Andrew Cuomo.

The committee is seeking a listing of all compensation paid Mr. Cassano this decade, “other than salary and cash bonus information previously provided to the committee.”

AIG asked for the loan in order to meet collateral requirements from counterparties on credit default swaps contracts the company had entered into. The $25 billion is the money AIG was forced to pony up to guarantee the CDS and maintain its credit ratings.

Since the initial agreement with the Fed and Treasury Sept. 17, AIG has also established an additional line of credit of up to $37.8 billion it can draw on in exchange for highly related government securities held by its life subsidiaries.

As of Friday, the Fed said in a weekly report, AIG has borrowed $86.2 billion from those two credit lines.

The company in reaction said, “We are working with Andrew Cuomo, New York attorney general, to address the issues raised by Congressman Waxman's letter and we are taking other steps to rebuild AIG and return value to the American taxpayer.”

“Of course,” added Joe Norton, a spokesman for AIG, “we will respond to Rep. Waxman's letter.”

Special Reports /

House Panel Deepens Probe Of AIG

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