US Senator Calls On AIG To Explain Use Of Bailout Funds
By Maya Jackson Randall
Dow Jones Newswire
October 31, 2008
WASHINGTON -(Dow Jones)- A top U.S. Senate Republican is calling on American International Group Inc. (AIG) to shed more light into how it has used its federal rescue money.
The call for greater transparency comes amid concerns that the troubled insurance giant could need more emergency funding, even after the Federal Reserve last month extended an $85 billion lifeline to the firm to help ensure the company would stay afloat. This month, the Federal Reserve agreed to lend AIG an additional $37.8 billion, which collectively gave the company access to nearly $123 billion in federal funds.
"AIG's use of the Federal Reserve loans is of great interest to the American people because they are footing the bill," Sen. Charles Grassley, R-Iowa, said in a recent letter to AIG Chief Executive Edward Liddy that was released Friday. "Moreover, some experts believe that AIG will need additional funding over and above the $123 billion the Federal Reserve has already lent it."
The Fed this week reported that the outstanding balance of a loan to AIG had decreased to $83.55 billion, nearly three-quarters of the insurer's $122.8 billion in total credit from the central bank.
Grassley, the top Republican on the Senate Finance Committee, said he wants a full and detailed accounting of AIG's expenditures to date and wants to know if AIG plans to tap into all of its $123 billion emergency credit. Additionally, the senator asked Liddy to explain if AIG thinks it will need to borrow additional funds in the future. He also wants the company to weigh in on when taxpayers can expect the insurance giant to repay the loan.
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