Top Republican Lawmaker Asks AIG to Explain Use of Federal Funds

By | November 3, 2008

U.S. Sen. Charles Grassley, the top Republican on the Senate Finance Committee, has asked troubled insurer American International Group Inc to provide full details of its use of a $123 billion government bailout.

AIG, which had been the largest insurer by market value, took an $85 billion loan from the U.S. Federal Reserve on Sept. 16 after large losses from guaranteed mortgage debt left it on the verge of bankruptcy.

In addition, the government has loaned AIG up to $37.8 billion more under a securities lending agreement.

Grassley, in a letter sent to Chief Executive Edward Liddy on Friday, said he wanted the insurer to disclose “a full and detailed accounting” of how it has spent borrowed government funds, how much more money it may need to borrow, and when American taxpayers can expect to be repaid.

He said AIG must not tamper in any way with any records that may be needed for the committee’s review.

An AIG spokesman said Liddy had received the letter, and the company will be responding.

(Reporting by Lilla Zuill, editing by Matthew Lewis)

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