GOP Candidate Challenges Sen. Kerry on AIG Bailout

Democratic Sen. John Kerry’s Republican challenger in Massachusetts called on him to sell any stock he has in insurance giant American International Group and donate all campaign contributions from officials at the company to taxpayers.

Republican Jeff Beatty said the contributions are a conflict of interest for the Massachusetts Democrat, who sits on the Senate’s Finance and Commerce committees. Kerry also is chairman of the Small Business Committee.

AIG is one of the highest-profile companies caught up in the turmoil on Wall Street. Last month the Federal Reserve provided an $85 billion loan to the company, which was on the brink of bankruptcy. On Wednesday the Fed provided a second loan of up to $37.8 billion.

“John Kerry must wash his hands of that stock and those campaign contributions and put it to work to help regular Americans,” Beatty said.

Kerry spokeswoman Brigid O’Rourke declined to address Beatty’s criticism of Kerry’s ties to AIG directly and instead dismissed Beatty’s comments as “phony political games.”

She pointed to Kerry’s work on behalf of troubled homeowners, including a provision providing more than $200 million in mortgage relief.

“The last thing homeowners in Massachusetts need is financial advice from a man who supports making permanent Bush’s tax cuts for the super-wealthy,” O’Rourke said.

Beatty said Kerry has had ties to AIG for years.

According to the Center for Responsive Politics, a private group that tracks money in politics, Kerry was one of 27 members of Congress with stock in AIG. Kerry reported having AIG stock valued at about $2 million.

Beatty also pointed to Kerry’s decision to accept $111,000 in campaign donations from officials at mortgage giants Fannie Mae and Freddie Mac, both of which have been essentially taken over by the government.

O’Rourke said Kerry has spoken about the need for greater regulation of Fannie Mae and Freddie Mac and in 2004 expressed support for legislation that “provides for strong, effective supervision and regulation of government-sponsored enterprises within a framework that assures their safety and soundness.”