Government Watchdog Says AIG Bailout Could Turn $15.1B Profit For Taxpayers

The Congressional Oversight Panel says the Treasury and the Fed failed to exhaust all options before rescuing the insurance giant. While AIG, Ben Bernanke and others are optimistic that taxpayers will be repaid, the latest congressional estimate puts the potential loss at $36 billion. A watchdog panel on Thursday blasted the government's $182-billion bailout of insurance giant American International Group Inc.

A watchdog panel reviewing the AIG bailout said U.S. taxpayers "remain at risk for severe losses" and that the government didn't act aggressively enough to protect taxpayers during the 2008 rescue.

The board of American International Group Inc decided on Wednesday not to join a lawsuit against the U.S. government over the terms of the company’s bailout, following two days of fevered backlash from Congress and the public over the prospect. AIG had been weighing whether to join a lawsuit filed by its former chief executive, Hank Greenberg, and his company Starr International, which owned 12 percent of the insurer before its 2008 rescue.

AIG’s new, post-bailout slogan.

Jan. 9 (Bloomberg) -- American International Group Inc. said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement.

(Reuters) - The U.S.

While Ackman and Loeb battle it out over HLF, the other potentially firework-prone battle has died an ignominious death. The WSJ reports that AIG has generously decided not to bit the Treasury hand that fed it just a few short years ago: