Among other issues, critics are asking why AIG was allowed to use federal bailout money to repay $13 billion in debt obligations to Wall Street powerhouse Goldman Sachs, as well as debts to foreign banks.
Former Treasury Secretary Henry M. Paulson was once chief executive of Goldman Sachs, for example, while AIG’s chief executive, Edward M. Liddy, was a member of Goldman’s board. The Treasury official who is in charge of the bailout, Neel Kashkari, is a former Goldman executive.
“Look at where the money went: Goldman Sachs, Paulson’s firm, foreign banks,” Sen. Jim Webb (D-Va.) said Wednesday. “AIG gave more money to foreign banks than we gave in loans to the auto industry.”
Gingrich and Republicans on Capitol Hill unleashed their anger on the current Treasury Secretary, Timothy F. Geithner, saying he bore responsibility for being overly generous in providing aid to failed companies like AIG.
Two outspoken House Republicans — Darrell Issa of California and Connie Mack of Florida — called for Geithner’s resignation, saying the AIG bonus controversy on top of existing doubts about the bailout made such a move necessary.
Other Republicans, including the ranking member of the Senate Banking Committee, Alabama’s Richard C. Shelby, offered caustic criticism of Geithner but stopped short of calling for his resignation.