While everyone and their grandmother was getting in a lather about AIG paying $165 million in retention bonuses to its notorious Financial Products unit, there wasn't nearly enough attention paid to the $120 billion channeled by the beleaguered company to make good on all its reckless derivatives trading. But one high-profile gadfly said this is where attention should be focused.
AIG only grudgingly released the names of its counterparties on credit default swaps backing subprime mortgage-based securities,but finally did report that between Sept. 16 and Dec. 31, 2008, about $120 billion was distributed in the form of cash, collateral, and other payments to banks, municipalitiesand other institutions–including nearly $13 billion to Goldman Sachs alone.
The industry's old nemesis, Eliot Spitzer–New York's former governor and crusading attorney general–called AIG to account in a March 17 commentary published by the online magazine “Slate” that was ominously headlined “The Real AIG Scandal.”
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