Maddocks: A.I.G. reconsidering whether it had any role in 2008 financial collapse

Philip Maddocks

Less than a week after declining to join a lawsuit against the federal government over its $182 billion financial crisis bailout, the American International Group says it is now questioning whether the company played any sort of role at all in the financial collapse.

The board says it is confused about how A.I.G. could have remained in business if its shareholders lost tens of billions of dollars, as some have said.

 “That is a real puzzle for some of us here,” said one board member. “I guess there is still a lot we don’t understand about that whole business.”

In reconsidering the company’s role in the financial crisis, the board said it just wanted to be “extra cautious and careful" in taking blame for something A.I.G. may not have had anything to do with.

“We just want to be meticulous about this and make sure we have dotted all the i’s and crossed all the t’s,” said an A.I.G. board member.

In a statement this week, A.I.G. said it had canvassed members of its board - most of whom joined after the rumored rescue effort - and found that very few had first-hand knowledge of the bailout or what was going on at the large insurer during those tumultuous months at the end of 2008.

“This is not something we should – or will – take lightly,” the board wrote in a statement. “We have heard a lot about the bailout. And while we are not ready to say it didn’t happen, we do have some questions. The fact that only weeks ago we were able to write a check for billions to the U.S. government for some past expense has us questioning whether we were ever in any financial trouble at all.”

On Wednesday, the board of the insurance company gathered at its headquarters in Lower Manhattan to listen to presentations offering insight into what are perhaps frivolous claims that the company was on the brink of collapse.

“If A.I.G. was, in fact, too big to fail, then we have to question the claim that A.I.G. might have been in danger of going out of business,” one board member suggested. 

That big banks like JPMorgan Chase are now posting record profits largely due to new home mortgages makes him wonder, he said, how A.I.G. could ever have run into trouble because of deteriorating mortgage securities that it had insured through credit-default swaps. But, he said, the board will consider all the claims thoughtfully, weighing all the appropriate factors, before coming to a decision that is appropriate for the board and the company.

"That is what sound corporate governance and properly undertaking our responsibilities and obligations to our shareholders are all about," he said.

The board said in its statement that it is just hoping to set the record straight.

“If this company is solely responsible for the financial collapse – and we don’t hear anyone on Wall Street owning up to a role in the debacle – then wouldn’t it follow that it is solely responsible for bringing the country back from the brink?” the board wrote. “We just want our just due. That’s all.”

The board said it would like to believe that it was the recipient of an enormous government bailout, and it hoped that by brining into its board meeting senior officials from the Treasury Department and the Federal Reserve Bank of New York, along with their high-priced lawyers from Davis Polk & Wardwell and Debevoise & Plimpton, that it would reach a deeper understanding of just what went on back in 2008.

“We are as much in the dark as you are,” one board member told the group.

In the meantime, A.I.G. said it planned to embark on an aggressive advertising campaign to thank taxpayers, just in case they really did rescue the company during the crisis.

In an accompanying statement, the company said its expectation is that the ads will "paint a portrait of A.I.G. that is worthy of an Oliver Stone movie."

Philip Maddocks writes a weekly satirical column. He can be reached at