Baucus questions second AIG loan

Citing a lavish retreat, the Senate Finance Committee chairman wants Federal Reserve Chairman Ben Bernanke to provide detailed information about the government’s relationship with insurance giant AIG. 

{mosads}Sen. Max Baucus (D-Mont.) said he was “outraged” over the $440,000 retreat that took place just days after the government prevented American International Group’s (AIG) bankruptcy with $85 billion in loans. He also noted that the Federal Reserve this week loaned AIG another $37.8 billion.

In a letter to Bernanke, Baucus asked why it was necessary to provide the additional loan to AIG.

The senator also said he wanted information about the degree to which the Federal Reserve could limit compensation to AIG executives, as well as procedures it could use to assess activities of the insurer’s senior management. In addition, he inquired under what circumstances the Fed could fire AIG employees.

“If AIG was throwing money around for tee times and hot stone massages while begging for Federal Reserve dollars, it’s a scandal and an outrage and heads will roll,” Baucus stated in a release. “I want to know who we can fire and how we can get this misspent money back, and I want both of those things to happen pronto.”

The AIG retreat was disclosed on Tuesday during a hearing of the House Oversight and Government Reform Committee.