American International Group President and CEO Robert Benmosche fired back at The New York Times in response to a Dec. 24 editorial the paper ran on whether the circumstances surrounding the 2008 bailout of the insurance giant could ever happen again.
The Times piece, "Could AIG Happen Again?" mainly addressed laws and regulations enacted in the wake of the financial crisis, and made a case that the global financial system remains vulnerable due to regulatory delays, opposition from the financial-services industry, and inaction from political leaders.
The thrust of the Times op/ed is summed up in its final sentence, "It is imperative that policymakers speed up the rules to help correct critical vulnerabilities in the financial system."
However, in a Letter to the Editor, published online by the Times on Jan. 6, Benmosche took issue with how the Times piece began its argument.
In its opening paragraph, the Times op/ed states, "In announcing the sale, the Treasury Department also said that the government had a 'positive return' of $22.7 billion—a sum that fails to take into account tax breaks A.I.G. received as a ward of the state. But whether the government profited from the bailout is not important. The truly vital issue is this: Could this happen again? Unfortunately, the troubling answer is yes."
Benmosche, in his letter, charges, "It is ironic that an editorial page that once proclaimed that the American International Group 'must be restructured for taxpayers to have a shot at recouping some of the bailout billions' and doubted that the company could repay its rescue would now say it is 'not important' whether the government profited from it."
He adds, "It is beyond ironic that the same page would contort settled tax law to assert that special tax treatment was part of the company's rescue and disregard the Federal Reserve's arrival as AIG's primary global regulator."
As he has done in the past, Benmosche talked up the company's accomplishments, credited the work of AIG's employees and thanked the American taxpayers for rescuing the company.
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