A House oversight panel is investigating the role Bush administration officials and regulators played in the collapse of American International Group. The first step of the investigation begins Thursday, House Oversight and Government Affairs Committee Chairman Ed Towns (D-N.Y.) tells the Huffington Post, when the committee hears testimony from former AIG CEO Hank Greenberg.
In November 2004, the Bush Justice Department and the Securities and Exchange Commission agreed not to prosecute AIG for allegedly helping companies fudge their books. In exchange, AIG agreed to host a government-appointed auditor in company meetings. At the time, Greenberg said it brought "finality to the claims raised by the SEC and the Department of Justice."
Towns said that Greenberg should be able to identify Bush administration officials involved in the decision-making around the settlement. Towns added the committee wants to know what Bush administration regulators knew about AIG's credit default swaps and other highly risky positions that brought the company down.
Asked if he would be directly pursuing Bush administration officials, Towns said: "No doubt about it. That's the reason I want to talk to Greenberg first. He might even point some folks out. That's of great interest to us."
Towns said the committee will also examine the AIG collapse to determine what legislation might be needed to make another occurrence less likely. Greenberg stepped down in 2005.
"The committees have not talked to Mr. Greenberg. They've only talked to Liddy" -- AIG's current head Edward Liddy -- "and Liddy has basically said, 'It was Greenberg's problem,'" Towns said.
"You can't have an investigation just moving forward. You have to look back as well. And that's what we're doing," said Towns.
The Bush administration's preferred way of dealing with corporate scandal was to defer prosecution. The Wall Street Journal reported last week that Bush prosecutors made 103 deferred and nonprosecution agreements with U.S. companies between 2002 and 2009. While Clinton was president, meanwhile, only 11 such pacts were entered into.
Criminal charges could result from the investigation, Towns said.
"All kinds of things could happen depending on what we find. And we're looking," he said. "Our eyes are wide open. Wherever the road leads us, that's where we plan to go."
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