Congressman Puts Heat On AIG Over Liddy Replacement

Washington

A member of Congress critical of American International Group's operations since the company's federal bailout is demanding that any candidates for the chairman and chief executive posts at the firm be required to make detailed financial disclosures.

Rep. Elijah Cummings D-Md., in a letter to the AIG board, said he wanted them to obtain financial background material equal to that required for top government positions.

The company has embarked on a search to replace Edward Liddy, who recommended that his posts of chairman and chief executive officer be held by two separate people. Mr. Liddy announced on May 21 that he will resign when the board finds his replacements.

In his letter, Rep. Cummings said he justifies establishing tough standards for an AIG top executive because the interests of the "ultimate shareholders of AIG"–the U.S. taxpayer–"should be paramount" in the selection of someone to head the company.

Taxpayers have held a 79.9 percent interest in the firm since September 2008, when AIG prevailed on the government for an $85 billion bailout loan. The company later obtained more loan money and credit supports, and its debt to Washington at one point exceeded $170 billion.

Mr. Liddy accepted the post for $1 a year in mid-September at the request of then Treasury Secretary Henry Paulson, just days after AIG accepted federal financial support.

Besides providing financial disclosures equal to that required for a top-level government job, any candidate to replace Mr. Liddy at AIG should "demonstrate the ability to lead organizations that provide both insurance products and the complex financial instruments so prominent in AIG's collapse," according to Rep. Cummings, referring to the credit default swaps traded at the company's Financial Products unit.

He added that AIG should also only consider candidates "of the highest integrity who are committed to maintaining an open and honest dialogue with the U.S. Congress."

He said a new leader should be provided with a "reasonable level of compensation."

Rep. Cummings, who has been a frequent critic of Mr. Liddy, said in his letter that the criteria he is proposing "should be self-evident."

Despite that, he said, he wrote his letter because "we find ourselves in a position in which months of misstatements and deception have eroded the trust of Congress in AIG's leadership to the point that the most basic constructs of corporate responsibility must be restated."

AIG did not immediately respond to a request for comment.