AIG Was Spending Taxpayer Money Lobbying Against Mortgage Regulation

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.”

AIG to Halt Lobbying Efforts [WSJ]

Comments

Edit Your Comment

  1. Tank says:

    those fuckers

    • BoomerFive says:

      @Tank: dude, you could not have been more eloquent. Exactly my thoughts. Greedy fucking bastards.

    • frodo_35 says:

      Thats a reach around with a Freddie Kruger glove. Those shameless bastards.

      • lincolnparadox says:

        @frodo_35: These are the kinds of reports that we’re getting now, while Bush is still in office.

        I’m almost afraid to see what we’ll find out about AIG, Fannie/Freddie, and the brokerage bunch after a real investigation is initiated…

        • nycaviation says:

          @lincolnparadox: Good luck with that. You do realize all the top Dems (Obama, Dodd, etc.) are on the banks’ payrolls, too, right?

          • papahoth says:

            @nycaviation: Unless you have some facts, you are trolling.

            • nycaviation says:

              @papahoth: Over the course of their political careers, the top three recipients of donations from Fannie and Freddie officers and employees…

              Sen. Dodd (D-CT): $165,400
              Sen. Obama (D-IL): $126,349
              Sen. Kerry (D-MA): $111,000

              • Trai_Dep says:

                @nycaviation: Rick Davis (R-McCain): ~$2,000,000, as recently as a month ago.
                Cited in another reputable article are other high-ranking McCain lobbyist/campaign managers, Charlie Black, whose firm worked for Freddie Mac for several years ending in 2005, and the deputy campaign finance chairman, Wayne L. Berman. As well as seventeen other high-ranking staffers. Davis alone is ten times those you listed, combined.
                More on topic, eight of McCain’s close advisors/fundraisers lobbied heavily for AIG (ibid).
                Let alone Phil Gramm, who needs no further explanation.

                So… Yay consistency?!

                • coolkiwilivin says:

                  @Trai_Dep: You pinhead, lobbying is while not very moral is still a valid job. These people were paid by this crappy company to lobby politicians who are responsible for writing laws. DC is filled with lobbyists. People like this switch back and forth between private and public sector. Ultimately a lobbyist has no power b/c it’s the politicians who actually votes. Lobbyist’s are a valid part of our system b/c it helps smaller interests get their point known but these pinheads like Dodd, Biden and Obama are the ones who write and vote on the laws. They are the ones we should be rightly angry at because they took their own interests (getting donations) over the people’s interests (legislation that was for the people and not helpful to a company.) From a broad perspective AIG does what every other company in the world tries to do: influence people to do things that helps it business. Biden, Obama & Dodd are directly at fault b/c they took money and wrote legislation that screwed us. Get off your self righteous horse and quit being political and rightly assign the blame for this no matter what party it hits.

                  • Trai_Dep says:

                    @coolkiwilivin: Well, you’re in a bit of a quandary then. If lobbying is a vital part of petitioning your representatives, and if money is simply another form of free speech, then what are you yammering on about political contributions? Schoolhouse Rock on!!
                    Else, it IS a concern and thus McCain is 1000x worse.

                    Take your pick. :)

                    PS: cites please of your stats. Original source. Thx.
                    PPS: “quit being political”? Do you bother to read what you’ve written? I talk policy to policy wonks, I talk politics to political wonks. Fair, right?

                  • Duffin (Ain't This Kitty Cute?) says:

                    @coolkiwilivin: Seriously, you don’t think that McCain doesn’t do the exact same thing? Both sides take their fair share of cut-backs and its disgusting. Lobbying should be illegal if the government can’t manage to keep track of the brides–I mean incentives, that lobbyists give to politicians. People should know by now that politicians get away with a lot and need to be watched.

    • effingroovin says:

      @Tank:

      Well put

    • Kishi says:

      @Tank: Exactly what I thought.

  2. Belabras ate my dingo! says:

    Jesus. Just close them down already. How much shady crap do they have to do before we just say no more?

    • BrianDaBrain says:

      @Belabras: It’s not a matter of how much shady crap they can do, rather, it’s about how much money they can suck from us before we publicly stone their CEO and board of directors.

    • effingroovin says:

      @Belabras:

      Heres a suggestion… FIRE EVERY ONE OF THEM.. and elect me to CEO! i promise to only spend a few thousand dollars on weekend getaway ;)

  3. craptastico says:

    i can’t help but think AIG might be the biggest SOBs to come out of this whole mess

  4. ZukeZuke says:

    Tell me again why public caning of these greedy bastards is not legal in the U.S.?

    • ludwigk says:

      @ZukeZuke: Apparently, they are too big and too important to allow them to fail, as they will just drag down more of the economy with them, so propping them up with tax dollars is the ‘better’ thing for all of us, or so goes the rhetoric.

      The thing I don’t get is, what is the source of their hubris? They did lots of business, they got really big, they FAILED. Their entire system came crashing down around their ears, and they needed a gargantuan bailout just to keep the doors open.

      Isn’t that testament to the folly of your ways? We let you do it your way. That was a massive failure, and everyone can see that now that its costing $400 for every US citizen just to keep you on life support. Why would you keep doing things your way?

      • garbagehead says:

        @ludwigk: hey, try telling the executives with $100 000 000 golden parachutes that their “folly ways” led them to “a massive failure”.

        Furthermore, if anyone thinks that “scrutiny from lawmakers” will straighten out these modern Emperors then you’re a bigger ass than the executives in question.

        *ass palm*

  5. JollyJumjuck says:

    Translation: “Bail us out so we can make a quick buck shafting you (the average person) again. Don’t worry about us; the government has proven it will bail *us* out before.”

    And some people wonder why the rich are thought of as inherently evil.

  6. darkryd says:

    fuck AIG.

  7. mizj says:

    This is disgusting.

  8. Froggmann says:

    And why haven’t we just kicked out the entire management of this firm?

    • tanya.peacock says:

      @Froggmann: I would like to know that too. As soon as that money was loaned we should have had someone in place to oversee all of their financial records and look at just where that money was going to go. Then that person would have had the power to stop things that shouldn’t have been happening form happening and firing any sort of management that was condoning or participating in this type of misuse.

      That’s smart business there.

    • lincolnparadox says:

      @Froggmann: Because they all resigned long before this crisis; like 6 months ago.

  9. kingmanic says:

    You know, for the “freest” democracy in the world, you sure let a lot of bullshit occur. Please America, why don’t you actually hold people responsible for things? This 3 day memory thing has got to change. Raise some noise, lobby for change, and maybe even arrest some people?

    • BoomerFive says:

      @kingmanic: I totally agree. Unfortunately what we have is a government that condones anything as long as they get the money for their campaigns. Thing is, we are reaching critical mass and things are gonna change. Much to the chagrin of quite a few old school politicians. What we need is what made America great, STATESMEN, not politicians.

    • BytheSea says:

      @kingmanic: The problem is that no one takes action while things are happening. They pretend they don’t see it — either to protect themselves or b/c they fear confrontation — and then whine about it later.

    • banmojo says:

      @kingmanic: for f$#@’s sake already. USA is NOT a democracy, it is a f$#@ing REPUBLIC. There is a significant difference therein, so please learn this people. It was made a republic because at the time there was not the possibility for it to be a true democracy. that time and situation has changed. now, today, we HAVE the ability utilizing the WWW to have the first true democracy the world has ever seen, where each and every citizen can cast their vote on each and every matter up for vote. now, whether or not every individual vote should count for the same weight/value, that’s a different matter. personally, I think that people who pay more taxes should have weightier votes. after all, they are paying more towards the operation of our government, ergo nation.

      but that’s just my conservative view. I’m sure there are plenty of libs who will think I’m an unbearable asshole, not that I give a flying f$@#.

      • Ajh says:

        @banmojo: Mhm Have you seen the accuracy of our voting machines? Liberal and conservative aside, there’s a real problem when our computers can’t even count.

        Also, our founding fathers said no to democracy because its not actually that great (much like communism, nice on paper not so good in practice.) “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. ” – Jefferson.

        @kingmanic: I have NO idea why the rich aren’t held accountable. I’m held accountable for every bad decision I make financially, and I’m working my ass off to make it right. Just because they have more money they get helped makes me sick..

        While the US is a republic a majority of it’s citizens think it’s a democracy, some of them still think Obama is a Muslim, or the Palin in a bikini picture is real. They’ll believe whatever the government tells them to. ..except this time..this time thousands of people said “No. don’t bail them out!”…and they did anyway.

        Every time I see another proof of how corrupt AIG was and how they’re not learning I just shake my head and sigh, because I have a 1 year old cousin, who will still see the financial repercussions of this long after I am dead.

        • Coyote says:

          @Ajh:
          If you would have read banmojos comment with the least bit of comprehension he meant to use the internet to vote with not the outdated and flimsy voting machines. However the first step should be to abolish the electoral college as it negates any “individual” vote as it is.

          And as for how the rich aren’t held accountable is rather simple, people like to put a face on their problems, when dealing with large companies/countries/etc there is no single person responsible. In this case every body from mortgage brokers and accountants to the receptionist at the front desk had an idea of what was going on but did nothing. This by no means absolves those that got the most rewards from it, in fact while caning them would be a good start what should have been VERY FIRST THING was to liquidate all personal assets and used that before any taxpayer money.

      • papahoth says:

        @banmojo: why don’t you form your own country with your own constitution then? or is spewing here as good as it get?

  10. crouton976 says:

    @ ZukeZuke: Caning? Hell I say we drag those greedy motherfuckers out into the streets, kicking and screaming, and publicly castrate and/or labotamize every last one of them. I’m soooooo disappointed in our government for not doing anything but threatening legal action(and not with much frequency at that) against these assholes, but I’m much more disappointed in the American people for taking some kind of action. A group of people should be marching to AIG’s headquarters right now with shotguns in tow claiming all hell is going to break loose when they get there.

    • crouton976 says:

      @crouton976: …American people for *NOT* taking some kind of action…

    • Tightlines says:

      @crouton976: Boy, people sure are tough sitting at a computer. So when are you leading the charge?

      • crouton976 says:

        @Tightlines: @ tightlines: What, do you work for AIG? I mean, only someone who works for them would have the audacity to respond with such a challenging tone to my comment. AIG’s actions recently have shown the whole “we’re going to do what we want, how we want without fear of reprecussions from the people” attitude. It’s like they are daring us to try and stop them, the same insinuation your reply carries.

        Obviously, I don’t mean we should literally storm AIG(though it’s not a bad idea), but we as a country should be so seething mad that AIG should FEAR that it would happen, AND FUCKING STOP THEIR GREED LADEN ANTICS.

    • failurate says:

      @crouton976: Can’t afford to take time off of work to protest anything, might lose my job. Lose my job, will lose my health insurance. Lose my health insurance and my job… likely to go bankrupt, end up in foreclosure.

      • crouton976 says:

        @lockers and failurate: I most certainly am not waiting for “someone else to do it for me”. In lieu of a better plan, I have started writing everyone I can think of, including Congressmen, Senators, various members of the press, both Obama and McCain, and anyone else I can think of. I have encouraged my friends and family members to do the same, as well as publicly stated my position here. I know that it’s not the best plan of action, but it’s all I have for now, and until I can come up with a better one I will continue to follow it. It’s kind of like learning to swim… if all you can do is kick and flail to stay above water, then by all means continue to kick and flail.

        My question to you is what is YOUR plan, other than making comments from the peanut gallery? Anyone can make snide comments and try to belittle and berate others, and in the short or long run, that doesn’t accomplish a damn thing.

        As far as losing jobs, health care, etc. is concerned, no one is asking you to wager anything you don’t want to. My only comment and request is don’t bitch about the incorrageable and “unconscionable” acts of profiteering gluttons unless you are willing to sacrifice something to bring about change. It may not be much, but I sacrifice my time at least writing to people to try to accomplish something. Just as with everything in life, anything worth having requires sacrifice.

        • cordeliapotter says:

          @crouton976: The thing is, haven’t hundreds of thousands of people already sacrificed enough over the centuries? In a few years, all the sacrifices we would have made would be wasted too. So why bother?

          • crouton976 says:

            @cordeliapotter: We bother because we want a change for the better in our lifetime, and one that hopefully lasts beyond our lifetime. I’m assuming that with a name like cordeiliapotter you are a female(if not I apologize). You enjoy the right to vote don’t you? Or, even if you are apathetic enough that you don’t vote, you certainly enjoy the right to have equal pay, have men not LEGALLY beat you, etc. If you happen to be African-American, Hispanic or Asian in decent, you enjoy the right to not have to use a separate door or water fountain then white people, right? All because women and people with an ethnicity other than white decided to “bother”.

            My question to you is why do you think that your sacrifices would be in vain? Clearly, some sacrifices throughout history were not, so why would yours be any less?

      • Rectilinear Propagation says:

        Can’t afford to take time off of work to protest anything…
        @failurate: I suspect that they like it that way.

  11. SigmundTheSeaMonster says:

    So if we sue AIG, would we have to pay taxes on our taxes that they are not accountable for in lobbying with?

  12. PixiePerson says:

    At first, I was okay with it: okay, they’ve probably already paid for it, they aren’t really going it’s other people, other excuses.

    Then I was annoyed by it: did you not see the last reports on you? The people hate you! You *need* them.

    Now? I’m so mad I can’t see straight. Seriously.

  13. blackmage439 says:

    “unconscionable”

    There’s that beautiful word again. Keep it up, Congress. It’s like a choir of angels.

    This whole situation brings to mind a scene from Family Guy when they’re searching through a landfill for something:

    *Brian jumps in the garbage and begins rolling around.

    Stewie: “Oh, good God man! That is disgusting!”

    Brian: “I know, I hate myself, but it feels soooo good!”

    In this case, Brian is obviously AIG. It seems bad loans and psychotic, if imaginary, profit is like crack to them. You know even some of the top brass must find their tactics to be “unconscionable”, but they just can’t bring themselves to stop. It’s like the RIAA, and how the Internets are always saying these record executives are trying to relive their glory days of sex, drugs, and quality music.

  14. zentex says:

    can we go ahead and declare AIG the winner of the “Worst Company in America 2009″?

    Just skip the whole “voting” dog-and-pony-show and get it over with.

    :-)

  15. Red_Eye says:

    This is why I said LET THEM GO UNDER

    Lynch mobs are too good for them.

    • TechnoDestructo says:

      @Red_Eye:

      Not everyone who works for a company that large is a scumbag. They don’t deserve ALL deserve to suffer.

      Also, this is one of those companies cited as “too big to fail.” (Maybe future administrations will start being a little more aggressive about denying mergers and takeovers, or requiring selling off some operations when they happen.) Allegedly it could have taken a lot of other companies that are otherwise sound with it.

      We, unfortunately, need some of the institutions that are being bailed out. Their leaders, however, have demonstrated quite ably that we do not have any need for them.

      • crouton976 says:

        @TechnoDestructo: AIG=”Too big to fail”? I think not.

        AIG=EPIC fail…

      • lockers says:

        @TechnoDestructo: Allegedly it could have taken a lot of other companies that are otherwise sound with it.

        Which is a lie. A solvent company could not have been taken down by an insurance company. the only companies it would take down are the ones that have debt to asset ratios greater than 1:1… You may be able to afford that 40k in credit card debt based on minimum payments, but what happens when your wife loses her job?

        • TechnoDestructo says:

          @lockers:

          The way I heard it explained on (IIRC) NPR was that they insure other institutions’ loans. (Except unlike Fanny and Freddie’s government loan guarantees, the lenders actually have to pay for it.) If they aren’t around to provide insurance (or to even service the insurance they already sold), confidence in lending is further eroded, digging the hole deeper.

          If they are truly so dominant in that field that failure would severely damage the economy as whole, maybe some new criteria have to be added to anti-trust considerations.

  16. icy_one says:

    And you know what? I bet they’re not the only ones doing it.

  17. vastrightwing says:

    As an individual, I don’t have the influence, I mean money, to affect policy. If only there was a way to pool our resources & buy political power.

    • heltoupee says:

      @vastrightwing: I’ve got an idea. Let’s have someone here draw up a nice form letter saying something along the lines of:

      “I, as an American citizen abhore the practices of AIG, specifically, blah blah blah. I am CC’ing this letter to my congressman, state senator, etc. Our leader’s decisions in this matter WILL be affecting my choices on election day.”

      Email Carpet-Bomb AIG’s execs with it, and CC anyone in DC that should listen. (AIG’s succumbed to media/public pressure, cancelling that junket for their execs). If enough of us ‘individuals that don’t matter’ do this, I’m sure someone will hear.

  18. snoop-blog says:

    If we let them go under it would have caused a lot of international turmoil. Freddie & Fannie and others were putting their mortgage loans in pools and stamping a AAA rating on them, and then selling them to foreign countries, when in fact there may have only been a very small portion of the loans that were actually AAA. If I’m a foriegn country, and you sell me a pool of collateral (the homes are collateral) backed loans and tell me they are AAA when in fact they are not, then they go bad. I (the foreign nation) am not just going to count my losses when I now have homes to go claim as mine. Paulson wanted the blank check to be able to buy these pools back, to ensure that foreign nations wouldn’t end up owning a lot of american property. Well that was one reason among others but I really don’t have the time to go into all that right now.

    • lincolnparadox says:

      @snoop-blog: We hit our debt limit this week. No one is going to loan us money again. If our economy is in the toilet, why not let the rest of the world slide down into the sewers?

      We should have saved our money, or just bought up the bad mortgages through the IRS. But we should also have let these companies fail.

  19. snoop-blog says:

    To get more on topic, I think that if we are going to make bribery illegal, than lobbying should be as well. How can you have one without the other? It obviously doesn’t work. It is one of the many flaws with our system.

    • crouton976 says:

      @snoop-blog: I second this motion.

    • Duffin (Ain't This Kitty Cute?) says:

      @snoop-blog: That along with earmarks on bills.
      And yes, I’m curious to see if Congress is just going to focus on the bad shit AIG does or if they’re watching all of the companies who are benefiting form the bail-out because AIG can not be the only big company trying to pull this.

    • Trai_Dep says:

      @snoop-blog: Well, Obama takes no Lobbyist PAC money and has no lobbyists heading his campaign, so that’s a start. (shrug)

    • YOXIM says:

      @snoop-blog: I absolutely agree. Lobbying IS bribery.

      As for this fiasco, and the many more that are undoubtedly going to come, (what is it now, one a week or something?), something must be done. The first step is to write our Senators and Representatives. If there’s one thing those guys care about it’s getting re-elected, and if a big enough shitstorm rises up threatening their re-election chances, they will do have to act.

      Mel Martinez is my Senator, and I am pleased that he is pushing for stricter regulation and keeping tabs on these corporate assholes. But that isn’t enough. More aggressive action must be taken, and it needs to happen now, before it gets to the point where AIG is the new G W Bush and people come to expect and accept their fuckups as part of everyday life.

      We must strike while the iron is hot, and strike hard enough to make a dent. Otherwise, we’re all screwed.

      • lincolnparadox says:

        @YOXIM: We have the technology to record all contact with our Congressmen. If you want to talk to a Rep or a Senator, even if it’s about something banal, that visit should be recorded.

        The same goes for the Executive. We don’t need to know the details, but there should be oversight.

    • TorrentFreak says:

      @snoop-blog:

      That will never fly. Our government works off cronyism from both parties. The entire system is designed to work off bribes from lobbyists. We are talking Civil War type crap to make it stop.

    • Mary Marsala with Fries says:

      @snoop-blog: Oh hey, here’s a great idea then, let’s just put up with it! Because that’s what America’s all about!

    • Mary Marsala with Fries says:

      @snoop-blog: Seconded — especially when it’s OBVIOUSLY a way for the very rich to influence the government in ways that are completely closed to everyone else. HOW, I wonder, is that democratic AT ALL? How is this a country of one person, one vote, when we call huge rich entities like AIG “people” and let them throw all their money at influencing our elected representatives????

      We all — ALL — need to stop worshipping money in this country, and stop letting people (and corporations) do anything they can afford to, as if having money confers some holy status that puts one above the laws and above the principles of our country. Seriously. ENOUGH.

  20. BuddyGuyMontag says:

    I really, really hate to say it, but this is one of the times I miss Eliot Spitzer.

  21. azntg says:

    Just one question:

    JUST HOW MANY MORE MISUSE OF PUBLIC MONEY SCANDALS HAVE TO SURFACE BEFORE LAWMAKERS/REGULATORS WILL DO ANYTHING ABOUT AIG?

    I’m sure there’s a lot more going on with AIG than being reported by the mainstream media. And this seriously has to end.

    • MercuryPDX says:

      @azntg: As I said in previous threads, just wait until the $700 Billion starts to be paid out. You’ll see all the companies lined up for that money following the AIG example.

  22. smythe says:

    Can I go ahead and proclaim them the winners of the 09 golden crap award now?

  23. neost says:

    AIG has over 1.1 Trillion (yes, with a T) in assets worldwide according to something I read early on in this mess. Why weren’t they required to sell off assets to maintain liquidity?

    Probably because nobody would want to buy the shit assets they want to get rid of while they hide the nice assets that would sell. Seems to me like if they had sold off assets we wouldn’t need to give them 700B.

    Anyone have a better understanding of why they couldn’t sell off assets?

  24. igmuska says:

    Did they, by any chance, include the price of the hookers at the party?

  25. TMurphy says:

    Congress has to slap on conditions that include mandatory jail time. Next false step should put them in handcuffs.

  26. Unnamed Source says:

    Seems like the perfect time to saddle them with significantly more regulations than would have seen otherwise, including a total ban on lobbying of any kind and significant restrictions on marketing activities.

  27. tamoko says:

    Well, doesn’t this just stink of shit… this reminds me of when I recently watched the film “The corporation” again, and had the re-realization (regardles of how smart I am, or any apparent hindsight) that corporations are only responsible to their shareholders, not governments, or even customers.

    I think the concept of a corporation has revolutionized commerce and the way humans interact with monies, goods, and services; but this is just too much.

  28. banmojo says:

    there is no institution ‘too big to fail’, including the ole US of A. history will tell us that all human institutions will fail in time. just give us time. you’ll see, or your children will see, or their children. just give US time.

  29. cccdude says:

    Ray Ray Ray Ray Ray-gulation!!!

    Has *any* good ever come from de-regulation? It only allows the greedy to exploit a capitalistic system at the cost of the average joe. I don’t believe in socialism, but I do believe in any critical industry that there should be basic protections and rules in place to protect the consumer from unfair business practices.

  30. The Great Aussie Evil says:

    When I see stuff like this, I wonder why we even abandoned the system of forbidding morons to marry.

  31. Phillip1952 says:

    My opinion cut off there money, revoke any license to do business and kiss there rears goodbye..

  32. savdavid says:

    Welcome to Bush’s economy and Amurica!

  33. u1itn0w2day says:

    And AIG said they will continue some lobbying which was NOT banned in the bailout.

    There should be NO LOBBYING period.

    What part of thank your lucky stars/you canNOT counduct business as usual that AIG does not understand?