Mr. Greenberg called for the creation of a Commission with subpoena power to investigate why AIG was targeted in the Government’s “bailout strategy.” Of the roughly $85 billion lent to AIG, $50 billion flowed to its counterparties in certain transactions. He noted that AIG negotiated 40% discounts with those counterparties, yet the Government has nonetheless required repayment in full. Mr. Greenberg believes a Commission is necessary to determine why and how the Government’s approach was formulated with respect to AIG, and why other entities were permitted to address similar liquidity problems in a different manner.
Another panelist, Steve Wallman, CEO of Foliofn Inc., agreed with Mr. Greenberg’s call for a Commission, noting that there are questions about whether certain entities were designated to be “winners” and “losers” by the Government in the credit-crisis. Mr. Wallman opined that these choices were not transparent or fully rational. Mr. Greenberg further added: “Favoring one set of shareholders over another is not consistent with American history or the Constitution.” Finally, with respect to recent compensation restrictions set by the Government with regard to AIG, Mr. Greenberg opined that it may be challenging for any corporate entity that received federal money to pay back taxpayers if that entity is losing its best talent because of a loss in compensation.