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."
Trust them about as far as you can throw them. it's all a heist upon us anyway.
Trust? Give me a break. AIG needs a complete restructuring so this will never happen again. This insurance company is TOO BIG. $3.2 billion barely scratches the surface. I undestand that AIG has competitors, but those competitors didn't receive $180 billion in taxpayer money. My suggestion is that AIG is broken up into 3 divisions.
Step 1: Trust
Step 2: Send cash
Step 3: Verify
Step 4: Send cash
Step 5: Receive campaign contributions
Step 6: Send cash
Step 7: Repeat beginning step 5
Government in action, change we can believe in.
Dear republicans, do your self a favor and tell Mitt Romney not to run in 2012. It would be a colossel waste of time and money. Putting Americans through another half assed campaign of a billionare.
I've heard of spending your money for kicks but Mitt throws millions of dollars down for his ego. white suit and all. Spare us from the nausea.
And yet no one has gone to jail from AIG? Too big to fail, is too big.
Let AIG go bankrupt and then stop fussing about them. Why is this the main focus of our legislators anyway? Our legislators are over-reaching their constitutional powers so far that they have no idea how corrupt they have become.
Don't let Dodd anywhere near this...PLEASE.
Who cares about their competition? Get our money back and let AIG and their debtholders go under. That's how the market is supposed to work.
Who here trust our congressman?
And by the way, why was there hardly any reporting of the million dollar bonuses paid out to Fannie Mae executives? Looks like the Dems do protect their friends.
They couldn't manage their own money before they recieved the federal funds, I don't trust them to manage everybody elses. They don't like answering to the government, quit asking for help.