Eliot Spitzer the former New York governor and attorney general, who used to blister American International Group in press releases, is now hitting the company as a member of the press over a "scandal."

In a recent online column for Slate titled "The Real AIG Scandal" Mr. Spitzer said recently revealed payouts of taxpayer cash that AIG made to big trading partners like Goldman Sachs hid "an enormous second round of cash to the same group that had already received TARP [Troubled Assets Relief Program] money already."

"It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure," he commented.

Goldman and AIG, he noted, almost merged a few years back and questions should be asked about their deeper relationship.

Mr. Spitzer as attorney general in 2002 was among the authorities that reached a $1.4 billion settlement with 10 big investment firms in a case involving undue influence of investment banking interests on securities research at brokerage firms. Goldman Sachs paid $110 million as part of that agreement. In 2005 as AG he sued AIG for accounting fraud.

He left his post as governor last March after his patronage of, and payments to, a prostitution ring were revealed.

His column Tuesday said the AIG payments to counterparties were justified "with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse."

But with workers being asked to sacrifice because of the economy he asked, "Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we [taxpayers] already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash?"

He suggested that Goldman Sachs Chief Executive Officer Lloyd Blankfein, Treasury Secretary Timothy Geithner, former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke be questioned under oath about what they knew about AIG and Goldman finances and the details of arrangements for taxpayer bailout money.

Mr. Spitzer opined it appeared this was an "inside job" and AIG was a conduit for giant capital flows "to the same old suspects with no reason or explanation."

Special Reports /

Columnist Spitzer Slams An AIG Bailout's "Hidden Cash"

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