The counterparties or policyholders of AIG's credit insurance policies (Credit Default Swaps) were paid at face value after AIG received Federal Taxpayer Monies in its bailout package. The market value however was half that amount, it is reported.
AIG is being asked why it did not negotiate. If any Federal officials had a role in paying, rather than negotiating, perhaps they will also be asked why, or why not. The difference to Goldman Sachs, for example, was $14 Billion at face value and $6 Billion less at market value. That is in addition to the separate Federal Taxpayer Monies that have been paid to Goldman to bail it out. See Cyrus Sanati, "Inspector to Audit A.I.G.'s Counterparty Payouts" in Dealbook Blog at The New York Times Online, Tuesday, April 7, 2009.
In addition to being asked why AIG did not negotiate, perhaps AIG's Directors and Officers who authorized the face-value payments to AIG's contract partners can address the issue of how this conduct measures as Good Faith and Fair Dealing with AIG's largest shareholders, then and now--the American Taxpayers.
Perhaps Federal officials, if any, in charge of how AIG decided to spend the Federal Taxpayer Monies will also address that issue.
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