NEW YORK (CNNMoney.com) – The CEO of bailed-out insurer American International Group told Congress Wednesday that it has made "substantial" progress in its restructuring efforts, but lawmakers said they wanted more to show for it.
"We are hearing, 'Trust us,' but we are not willing to let $180 billion go just on trust," said Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight Committee. "We will question; we will inquire; we will verify."
Chief Executive Edward Liddy, who said AIG is diligently working toward paying back its government bailout, described the company's plan for paying back billions of taxpayer dollars.
"We continue to weigh every decision regarding the restructuring with several criteria in mind," Liddy said. "Will this action facilitate a reduction in systemic risk? Is this action the best use of the federal assistance we are receiving? Will this action enhance our ability to pay back the government?"
"The restructuring efforts ... are a reflection of this thought process," he added.
Liddy was asked by Towns to submit a roadmap of the company's repayment and restructuring plan, known as "Project Destiny," prior to the hearing.
Towns said AIG has not complied. "The questions we are raising today should be easy enough to answer, but unfortunately, AIG has failed to fully respond to straightforward requests for information," he said. "This cannot continue."
Liddy said AIG will provide the committee with "broad brush strokes" about the plan but that details would provide sensitive information to the company's competitors.
The committee was also set to hear testimony from the three trustees appointed by the Federal Reserve to represent the taxpayers in overseeing AIG's restructuring. J.W. Verrett, a professor of law at Georgetown University, is also expected to testify.
Bailout woes: AIG's recovery was expected to be a relatively quick process. The strategy in September: Taxpayers provide $85 billion to help the company meet its obligations and give it the ability to sell some of its businesses to repay the loan.
But the government's bailout of AIG ballooned to $182 billion in eight months, of which AIG has drawn more than $130 billion. But the insurer has managed to pay back just $3.2 billion.
In the current credit environment, few companies have been receptive to AIG's asking prices. Furthermore, as the value of underlying assets on its insurance contracts fell, AIG was required to post billions of dollars in collateral as a guarantee in the event of a credit default.
Though details of the company's plan are sparse, AIG has said its restructuring involves the government taking a stake in AIG's foreign life insurance units, and AIG selling up to 20 percent of its property and casualty business (AIU) in an initial public offering.
"Much of what has been done with that money has been done in the dark," said Towns. "In fact, the one thing that stands out most about the collapse and federal rescue of AIG is the shroud of secrecy that has blanketed the entire sequence of events. This secrecy has only made the situation worse."
AIG posted its sixth straight quarterly loss last week, even as it made significant strides to wind down its financial products division, which was at the root of the company's collapse.
If AIG can, in fact, pay back the government, it won't be any time soon. The company said that AIU's IPO could take place sometime in 2010, at the earliest.
"How long the plan will ultimately take will very much depend on how quickly and how strongly the global economy recovers," Liddy wrote in prepared testimony. "And, because we are all committed to ensuring that the mistakes of the past are not repeated, we must take the time and exercise the diligence to do this restructuring properly."