AIG apparently spends a pretty significant chunk of cash lobbying politicians, says the WSJ, a practice they’re being forced to abandon as they come under more scrutiny from lawmakers.
From the WSJ:
Democratic Sen. Dianne Feinstein of California and Florida Republican Sen. Mel Martinez wrote to AIG Chief Executive Edward Liddy on Friday, telling him not to use its government loan to try and roll back tougher mortgage-industry licensing requirements and other controls.
The Wall Street Journal reported on Thursday that AIG was still engaged in a state-by-state effort to soften new federal regulations requiring mortgage originators get licenses and provide extensive background information. Abuses and fraud by mortgage originators helped ignite the crisis that threatened AIG with bankruptcy and forced the federal intervention.
Sens. Feinstein and Martinez sponsored the mortgage-oversight legislation, which Congress passed in July as part of a sweeping housing-industry rescue package.
“AIG has spent millions to lobby states to soften the licensing provisions, even after taxpayers loaned AIG more than $120 billion to prevent its collapse precipitated by excessive risk-taking,” the senators wrote in their Friday letter to Mr. Liddy. “We find it unconscionable.”