U.S. Lawmaker Urges AIG CEO Liddy to Quit Over Goldman Sachs Stake

By | April 17, 2009

A U.S. congressman Thursday expressed concern about a stake in Goldman Sachs Group Inc. held by Edward Liddy, CEO of bailed-out insurer American International Group Inc., and urged him to quit.

Liddy owns shares and restricted stock units in Goldman that could be worth more than $3 million, according to filings at the U.S. Securities and Exchange Commission.

Goldman, a major brokerage and banking firm, got a large share of $90 billion in counterparty payments made by AIG, a recipient of $180 billion in taxpayer aid since last year.

“I am extremely concerned by recent media reports that AIG CEO Edward Liddy owns more than $3 million of stock in Goldman Sachs, which topped the list of companies that received billions of dollars in counterparty payments from AIG,” said Representative Elijah Cummings in a statement.

“For months, I have been calling on Mr. Liddy to resign from his position at the helm of AIG, and in light of the new information about his stock holdings at Goldman, I renew that call today,” Cummings added.

Liddy’s holdings were first reported by The Washington Examiner.

Cummings, a Maryland Democrat, said: “Regardless of whether or not Mr. Liddy is acting in the best interest of AIG or of his stock in Goldman, even the appearance of conflict of interest is a reason for alarm.”

An AIG spokeswoman said Liddy owned Goldman Sachs shares before he joined the Goldman board and that, when he joined, he chose to take his compensation in restricted stock. Liddy resigned from the Goldman board in September 2008.

“He will receive his restricted stock in the form of common, unrestricted shares in May of 2009,” she said, adding that Liddy has never sold Goldman shares.

She said Liddy “was not involved in discussions with counterparties, including Goldman Sachs, related to the purchase of collateralized debt obligations or the termination of related credit default swaps. Mr. Liddy is performing his duties with AIG as public service for $1 per year.”

The in-house watchdog for the Treasury Department’s financial rescue program is examining billions of dollars in counterparty payments from AIG to major banks.

AIG disclosed on March 15 it had paid more than $90 billion to Goldman and other banks, many based in Europe.

(Additional reporting by Christian Plumb and Jonathan Stempel in New York; Editing by James Dalgleish)

Topics USA Legislation AIG

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