American International Group Inc (AIG) used more than US$90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar US government bailouts.
Some of the biggest recipients of the AIG money were Goldman Sachs at US$12.9 billion, and three European banks — France’s Societe Generale at US$11.9 billion, Germany’s Deutsche Bank at US$11.8 billion and Britain’s Barclays PLC at US$8.5 billion. Merrill Lynch, which is also undergoing federal scrutiny of its bonus plans, received US$6.8 billion as of Dec. 31.
The embattled insurer’s disclosure on Sunday came amid outrage on Capitol Hill over its payment of tens of millions in executive bonuses, and followed demands from lawmakers that the names of trading partners who indirectly benefited from federal aid to AIG be made public.
The company, now about 80 percent owned by US taxpayers, has received roughly US$170 billion from the government, which feared that its collapse could cause widespread damage to banks and consumers around the globe.
“The ability of AIG to meet its obligations is important to the stability of the US financial system and to getting credit flowing to households and businesses,” US Federal Reserve spokeswoman Michelle Smith said.
The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.
Other banks receiving between US$1 billion and US$3 billion from AIG’s securities lending unit include Citigroup Inc, Switzerland’s UBS AG and Morgan Stanley.
Municipalities in certain states, including California, Virginia and Hawaii, received a total of US$12.1 billion under guaranteed investment agreements.
The company said it used billions more to fund its Maiden Lane business, which was set up following the federal bailout to purchase toxic assets, and to repay debt and provide capital for some of its operations.
“I’ve been asking for this information for months. This is a good first step, but I’m concerned by how long it took,” said Democratic Representative Carolyn Maloney, who is chair of Congress’ Joint Economic Committee.
The details from AIG came after administration officials and top Republicans voiced sharp criticism over US$165 million in bonus payments AIG said it must make on Sunday. The contracts are part of a larger total payout which has been reportedly valued at US$450 million.
In a letter to US Treasury Secretary Timothy Geithner dated Saturday, AIG chairman Edward Liddy said outside lawyers informed AIG that it had contractual obligations to make the payments and could face lawsuits if it did not do so.
Liddy said the company entered into the bonus agreements early last year before AIG got into severe financial straits and was forced to obtain a government bailout.
AIG has agreed to the government’s requests to restrain future payments.
COMBINING FORCES: The 66th Marine Brigade would support the 202nd Military Police Command in its defense of Taipei against ‘decapitation strikes,’ a source said The Marine Corps has deployed more than 100 soldiers and officers of the 66th Marine Brigade to Taipei International Airport (Songshan airport) as part of an effort to bolster defenses around the capital, a source with knowledge of the matter said yesterday. Two weeks ago, a military source said that the Ministry of National Defense ordered the Marine Corps to increase soldier deployments in the Taipei area. The 66th Marine Brigade has been tasked with protecting key areas in Taipei, with the 202nd Military Police Command also continuing to defend the capital. That came after a 2017 decision by the ministry to station
ALL-IN-ONE: A company in Tainan and another in New Taipei City offer tours to China during which Taiwanese can apply for a Chinese ID card, the source said The National Immigration Agency and national security authorities have identified at least five companies that help Taiwanese apply for Chinese identification cards while traveling in China, a source said yesterday. The issue has garnered attention in the past few months after YouTuber “Pa Chiung” (八炯) said that there are companies in Taiwan that help Taiwanese apply for Chinese documents. Minister of the Interior Liu Shyh-fang (劉世芳) last week said that three to five public relations firms in southern and northern Taiwan have allegedly assisted Taiwanese in applying for Chinese ID cards and were under investigation for potential contraventions of the Act Governing
‘INVESTMENT’: Rubio and Arevalo said they discussed the value of democracy, and Rubio thanked the president for Guatemala’s strong diplomatic relationship with Taiwan Guatemalan President Bernardo Arevalo met with US Secretary of State Marco Rubio in Guatemala City on Wednesday where they signed a deal for Guatemala to accept migrants deported from the US, while Rubio commended Guatemala for its support for Taiwan and said the US would do all it can to facilitate greater Taiwanese investment in Guatemala. Under the migrant agreement announced by Arevalo, the deportees would be returned to their home countries at US expense. It is the second deportation deal that Rubio has reached during a Central America trip that has been focused mainly on immigration. Arevalo said his
‘SOVEREIGN AI’: As of Nov. 19 last year, Taiwan was globally ranked No. 11 for having computing power of 103 petaflops. The governments wants to achieve 1,200 by 2029 The government would intensify efforts to bolster its “Sovereign Artificial Intelligence [AI]” program by setting a goal of elevating the nation’s collective computing power in the public and private sectors to 1,200 peta floating points per second (petaflops) by 2029, the Executive Yuan said yesterday. The goal was set to fulfill President William Lai’s (賴清德) vision of turning Taiwan into an “AI island.” Sovereign AI refers to a nation’s capabilities to produce AI using its own infrastructure, data, workforce and business networks. One petaflop allows 1 trillion calculations per second. As of Nov. 19 last year, Taiwan was globally ranked No. 11 for