| 00:01:01 |
Waxman, Henry - U.S. Representative, [D] California
CEO, MR. SULLIVAN SERVED AS VICE CHAIRMAN AND CO-CHIEF OPERATING OFFICER OF AIG. ROBERT WILLUMSTAD SERVED AS CEO IN 2008. PRIOR TO BE NAMED CEO, HE SERVED...
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| 00:03:08 |
Sullivan, Martin J. - President and CEO
UNFOLDED, AND HERE TODAY TO ASSIST THE COMMITTEE IN UNDERSTANDING THE EVENTS THAT LED TO THE FEDERAL RESCUE OF AIG, HOW THE EXAMPLE OF AIG FITS INTO THE...
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| 00:10:43 |
Waxman, Henry - U.S. Representative, [D] California
FROM THE FEDERAL RESERVE IS A CRISIS IN CONFIDENCE THAT HAS AFFECTED THE ENTIRE GLOBAL ECONOMY.
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| 00:10:49 |
Willumstad, Robert B. - Chairman and CEO
WHEN I BECAME CEO OF AIG IN JUNE OF THIS YEAR, THE DECLINE IN THE U.S. HOUSING MARKET HAD ALREADY BEEN UNDERWAY FOR MONTHS. MOST HOMEOWNERS WILL STILL...
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| 00:16:34 |
Waxman, Henry - U.S. Representative, [D] California
BOTH OF YOU SEEM TO BE SAYING THAT THESE EVENTS HAVE NOTHING TO DO WITH YOUR MANAGEMENT, THEY HAVE TO DO WITH A TSUNAMI OF ACTIVITIES OVER WHICH YOU...
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| 00:19:03 |
Sullivan, Martin J. - President and CEO
SAYING. ADD THAT TIME, WE WERE ALREADY PUTTING IN PLACE COMPENSATING CONTROLS TO MAKE SURE THAT THE EVALUATION PROCESS WAS. . >> YOU WERE TRYING TO...
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| 00:19:35 |
Waxman, Henry - U.S. Representative, [D] California
TO HAVE A PRICE -- SEEM TO HAVE A PRICE. >> I BELIEVE HE RESIGNED. >> HE WAS RESIGNING BECAUSE HE WAS BLOCKED FROM DOING HIS JOB. >> IT WAS INVESTIGATED...
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| 00:20:02 |
Sullivan, Martin J. - President and CEO
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| 00:20:06 |
Waxman, Henry - U.S. Representative, [D] California
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| 00:20:11 |
Sullivan, Martin J. - President and CEO
I ACTUALLY DO NOT REMEMBER THE COMMENTS. >> YOU DO NOT REMEMBER? >> NO. >> WE DO NOT HAVE A FULL RECORD BEFORE THE COMMITTEE, BUT WE DID REQUEST ALL...
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| 00:20:53 |
Willumstad, Robert B. - Chairman and CEO
YOU BOTH BRUSHED IT ASIDE.
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| 00:20:55 |
Waxman, Henry - U.S. Representative, [D] California
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| 00:20:56 |
Willumstad, Robert B. - Chairman and CEO
IS THAT AN UNFAIR CHARACTERIZATION? >>
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| 00:20:59 |
Waxman, Henry - U.S. Representative, [D] California
I DO NOT RECALL THE COMMITTEE OR THE COMMENTS. >> YOU WERE THE CHAIRMAN OF THE BOARD AT THE TIME. >> YES. >> MR. SULLIVAN, YOU WERE THE CEO AND YOU DO...
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| 00:21:20 |
Willumstad, Robert B. - Chairman and CEO
OF COURSE, THAT IT IS SIGNIFICANT IS THIS MAN WAS BROUGHT
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| 00:21:24 |
Waxman, Henry - U.S. Representative, [D] California
IN TO FIND
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| 00:21:25 |
Willumstad, Robert B. - Chairman and CEO
OUT ABOUT THESE KINDS OF PROBLEMS WHICH ENDED IN BRINGING
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| 00:21:29 |
Waxman, Henry - U.S. Representative, [D] California
AIG TO ITS KNEES. HE COULD HAVE GIVEN YOU THE INFORMATION EXCEPT HE WAS BLOCKED BY THE FELLOW IN LONDON WHO
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| 00:21:35 |
Sullivan, Martin J. - President and CEO
DID NOT WANT HIM TO KNOW WHAT HE WAS UP TO. I JUST
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| 00:21:41 |
Waxman, Henry - U.S. Representative, [D] California
FIND THAT VERY DISTURBING. I AM GOING TO RESERVE THE BALANCE OF MY TIME. >> THANK-YOU. ACCORDING TO DOCUMENTS OBTAINED BY THE COMMITTEE ON MARCH 11, 2008,...
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| 00:22:09 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
ADVOCATING PAID FOR PERFORMANCE AS A STANDARD FOR EXECUTIVE COMPENSATION? >> FIRST OF ALL, SIR, CAN I JUST CLARIFY -- COMPENSATION WAS OUT -- WAS DISCUSSED...
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| 00:22:35 |
Sullivan, Martin J. - President and CEO
TO. IF YOU ARE REFERRING TO THE DISCUSSIONS WE HAD A ONE -- WE HAD WITH SENIOR PARTNERS -- IS THAT WHAT YOU ARE REFERRING TO, SIR? >> I WILL ASK THE...
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| 00:23:10 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
A CHARTERED INSURANCE MAN. >> OK. YOU JOINED AIG IN 1971. >> YES. >> CAN YOU TELL US HOW THE MARKET TO MARKET MOVES AFFECTED AIG'S POSITION, AND YOU THINK...
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| 00:23:28 |
Sullivan, Martin J. - President and CEO
CONTRIBUTED TO THE DETERIORATION OF THE COMPANY? >> I
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| 00:23:31 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
WOULD LIKE TO MAKE A COUPLE OF COMMENTS. I HAVE NO CONCERN OR PROBLEM -- >>
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| 00:23:37 |
Sullivan, Martin J. - President and CEO
CAN MOVE THAT CLOSER? >> I
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| 00:23:41 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
WOULD LIKE TO MAKE A COUPLE OF COMMENTS ABOUT MARKET TO MARKET. I HAVE CONCERNS ABOUT THE VALIDITY OF MARKET TO MARKET ACCOUNTING. I HAVE CONCERNS THAT...
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| 00:23:51 |
Willumstad, Robert B. - Chairman and CEO
WRITTEN STATEMENT. WHEN THERE IS NO MARKET, THE ABILITY TO VALUE
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| 00:23:57 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
SECURITIES BECOMES SOMEWHAT DIFFICULT.
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| 00:24:02 |
Willumstad, Robert B. - Chairman and CEO
IT REQUIRES A FAIR AMOUNT OF JUDGMENT. THERE ARE, AS I SAID, NO SPECIFIC MARKETS FOR THE SECURITIES. THE COMPANY HAS TO GO THROUGH A PROCESS WHICH USES...
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| 00:24:59 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
WERE QUESTIONS WITH THIS PORTION OF THE BUSINESS. WHY
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| 00:25:02 |
Willumstad, Robert B. - Chairman and CEO
DID AIG STOP WRITING THESE POLICIES? >> I DO NOT KNOW. I WAS NOT ON THE BOARD AT THAT TIME. >> [INAUDIBLE] >>
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| 00:25:08 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
I AM SORRY? >> IN HIS TESTIMONY HE SAID THAT THEY STOPPED WRITING POLICIES ON MULTI-SECTOR CREDIT DEFAULTS SWAPS.
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| 00:25:25 |
Willumstad, Robert B. - Chairman and CEO
CAN YOU TELL US -- >>
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| 00:25:27 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
BASE AMONG -- ON A RECOLLECTION, BECAUSE
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| 00:25:32 |
Sullivan, Martin J. - President and CEO
OF THAT TIME I WAS FOCUSED
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| 00:25:36 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
ON OTHER ISSUES, OBVIOUSLY THERE WAS A BIG DELAY IN 2005 IN OUR ACCOUNTS. FROM WHAT I UNDERSTAND FROM THE INVESTIGATION, THAT DECISION WAS MADE BY AIG...
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| 00:25:50 |
Sullivan, Martin J. - President and CEO
RISK-MANAGEMENT, THE CHIEF RISK OFFICER IN THE CHIEF CREDIT OFFICER. >> THEY SAW A PROBLEM OF EASILY. >> THEY SAW, FOR WHAT I UNDERSTAND, A DETERIORATION...
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| 00:26:15 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
I DO NOT KNOW THE ANSWER TO
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| 00:26:17 |
Sullivan, Martin J. - President and CEO
THAT, SIR. >> IS THERE ANY LINKAGE BETWEEN AIG AND THE GSE'S IN TERMS OF
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| 00:26:27 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
FANNIE MAE AND FREDDIE MAC BUYING THESE? >> I AM NOT AWARE OF WHAT OUR EXPERTS -- EXPOSURE WAS TWO FANNIE MAE AND FREDDIE MAC. >>
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| 00:26:36 |
Sullivan, Martin J. - President and CEO
I HAVE YOUR STATEMENT APPEAR ON THE BOARD. >> THANK
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| 00:26:41 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
YOU FOR PUTTING UP. I APPRECIATE THAT. >> WHEN I WAS TALKING TO THE COMPENSATION COMMITTEE, WHAT I WAS
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| 00:26:53 |
Sullivan, Martin J. - President and CEO
PROPOSING -- WHAT THEY SHOULD ACTUALLY AWARD THE PARTNERS IN SENIOR PARTNERS,
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| 00:26:58 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
I THINK YOU MENTIONED THIS EARLIER -- THERE WERE 700 PARTNERS. THERE
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| 00:27:02 |
Sullivan, Martin J. - President and CEO
WERE ABOUT 70 SENIOR PARTNERS. I WAS MAKING A RECOMMENDATION. I SHOULD
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| 00:27:08 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
STRESS THAT NOBODY IN AIG PARTICIPATED IN THIS PLAN, OR THE SENIOR PARTNERS' PLAN. I WAS TRYING TO MAKE SURE THAT WE RETAIN OUR KEY PEOPLE. WE NEEDED...
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| 00:27:54 |
Unidentified Speaker, -
OF OUR BUSINESS AND NOT IN AIG/FP. >>
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| 00:28:02 |
Sullivan, Martin J. - President and CEO
YOU DO NOT SEE ANY RELATIONSHIP BETWEEN FANNIE MAE AND FREDDIE MAC AND WHAT WAS HAPPENING IN AIG THEN? >> I DO NOT. >> OK. THE ACCOUNTING SCANDALS --...
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| 00:28:25 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
GETTING INTO THIS BUSINESS. THE ACCOUNTING SCANDALS WITH FANNIE MAE AND FREDDIE MAC RAISE
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| 00:28:30 |
Willumstad, Robert B. - Chairman and CEO
ANY RED FLAGS AS TO WHETHER YOU ARE
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| 00:28:32 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
ENSURING TAINTED INVESTMENTS? >> NO. >> OK. MOVE ON.
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| 00:28:39 |
Willumstad, Robert B. - Chairman and CEO
LET'S TAKE YOU BOTH TO THE
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| 00:28:43 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
EARLY 2002 TIMEFRAME. IS THERE ANYTHING IN GOVERNMENT REGULATION, GOING BACK TO THIS EARLY
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| 00:28:53 |
Willumstad, Robert B. - Chairman and CEO
TIME FRAME, THAT WOULD HAVE CHANGED YOUR BUSINESS MODEL
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| 00:28:56 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
AND AVOIDED A CATASTROPHE? YOU WERE SOMEWHERE ELSE AT THAT POINT. BUT WITH CITIGROUP -- MR. SULLIVAN? >> CAN I CLARIFIED -- THE YEAR 2000? >> THAT TIMEFRAME....
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| 00:29:30 |
Sullivan, Martin J. - President and CEO
TIMEFRAME, AND SHE HAS SEVERAL RULE CHANGES TAKE PLACE
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| 00:29:34 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
AT THAT TIME. >>
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| 00:29:35 |
Sullivan, Martin J. - President and CEO
IF YOU'RE REFERRING TO MY COMMENTS -- >> NO, I AM TALKING ABOUT THE COMMODITIES FUTURES. >>
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| 00:29:48 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
I DO NOT THINK ANYTHING IN THE RECORD, TO THE VERY BEST OF MY KNOWLEDGE, WOULD HAVE CHANGED WHAT OCCURRED. >> THAT IS WHAT I AM ASKING. >>
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| 00:29:57 |
Sullivan, Martin J. - President and CEO
I RESERVE THE BALANCE OF MY TIME FOR NOW. >> MR.
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| 00:30:04 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
SULLIVAN, JUST SO I HAVE THIS
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| 00:30:09 |
Sullivan, Martin J. - President and CEO
CORRECT, YOU ASKED THAT YOUR BONUS, BASED ON PERFORMANCE NOT COUNT THE LOSSES THAT
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| 00:30:16 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
AIG HAD? IS THAT RIGHT? >> YES,
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| 00:30:20 |
Unidentified Speaker, -
SIR. I WAS REFERRING TO WHAT TO BE PAID TO THE PARTNERS
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| 00:30:24 |
Waxman, Henry - U.S. Representative, [D] California
IN SENIOR PARTNERS -- >> YOU WERE INCLUDED IN THAT. >> I WAS INCLUDING THAT. >> SO EVERYBODY IN THAT GROUP, INCLUDING YOU, BUT THE BONUSES AS IF YOU PERFORM...
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| 00:30:40 |
Sullivan, Martin J. - President and CEO
COMPENSATION COMMITTEE SETS MY RESUME OPERATION --
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| 00:30:45 |
Waxman, Henry - U.S. Representative, [D] California
MY REMUNERATION.
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| 00:30:49 |
Sullivan, Martin J. - President and CEO
ON BEHALF
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| 00:30:50 |
Waxman, Henry - U.S. Representative, [D] California
OF THE EMPLOYEES OF AIG, YES. >> INCLUDING YOURSELF? >> I WAS FOCUSING ON MORE THAN ME. >>
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| 00:30:58 |
Sullivan, Martin J. - President and CEO
AND AIG, THEY WERE GETTING PAID BONUSES THAT WERE EVEN HIGHER THAN THE BONUSES YOU WERE GETTING. IS THAT CORRECT? >> IN SOME INSTANCES, YES. >> EVERYBODY
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| 00:31:13 |
Waxman, Henry - U.S. Representative, [D] California
WAS DOING REALLY WELL. YOU
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| 00:31:15 |
Sullivan, Martin J. - President and CEO
WERE NOT GETTING PENALIZED. PURINE PENALIZED BECAUSE OF THE LOSSES -- YOU WERE
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| 00:31:23 |
Waxman, Henry - U.S. Representative, [D] California
GETTING PENALIZED BECAUSE OF THE LOSSES. YOU STILL GOT THE BONUSES. AND THEY GOT
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| 00:31:31 |
Sullivan, Martin J. - President and CEO
THEIR BONUSES BECAUSE THERE WERE BEING HANDLED IN A
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| 00:31:33 |
Waxman, Henry - U.S. Representative, [D] California
DIFFERENT WAY, EVEN THOUGH THEY WERE THE ONES BRINGING IN THE LOSSES. IS THAT A FAIR STATEMENT? >> JUST FOR CLARITY, SIR, WITH REGARD TO MY BONUS, IT...
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| 00:32:00 |
Sullivan, Martin J. - President and CEO
IN 2007. I BELIEVE WE HAD A DEFERRED COMPENSATION PLAN. AGAIN, I AM DOING THIS FROM MEMORY. >> THANK YOU. CONGRESSWOMAN MALONEY? >> THANK YOU, MR. CHAIRMAN....
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| 00:32:28 |
Waxman, Henry - U.S. Representative, [D] California
RISKY, EXOTIC TOOLS THAT YOU WERE INVESTING IN, HAVE NO VALUE AND PEOPLE DO NOT WANT TO BUY THEM. WHAT THE FIRST PANEL SAID WAS
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| 00:32:37 |
Maloney, Carolyn - U.S. Representative, [D] New York
ONE OF THE KEY FACTORS WAS INADEQUATE REGULATION OF SO- CALLED CREDIT DEFAULTS WHAT. IT IS A 58 TRILLION DOLLAR MARKET. DOUBLE THE SIZE OF THE ENTIRE...
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| 00:34:44 |
Sullivan, Martin J. - President and CEO
85 TRILLION DOLLARS, ASHE DID THEY LOSE? -- HOW MUCH DID
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| 00:34:52 |
Maloney, Carolyn - U.S. Representative, [D] New York
THEY LOSE? IF YOU COULD GET THAT BACK
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| 00:34:55 |
Sullivan, Martin J. - President and CEO
TO US IN WRITING, THAT
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| 00:34:57 |
Maloney, Carolyn - U.S. Representative, [D] New York
WOULD BE GREAT. I WOULD ALSO LIKE TO ASK YOU, MR. SULLIVAN, IF THE SAME RULES THAT APPLY TO YOUR INSURANCE COMPANY, WHERE YOU HAD SOME BACK UP, SOME RESERVES,...
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| 00:35:43 |
Sullivan, Martin J. - President and CEO
THERE IS NO CAPITAL RESERVE BEHIND THE SWAPS. >> NO. >> YOUR GAMBLING TRILLIONS OF
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| 00:35:51 |
Maloney, Carolyn - U.S. Representative, [D] New York
DOLLARS. >> I WOULD NOT REFER TO IT AS GAMBLING.
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| 00:35:55 |
Sullivan, Martin J. - President and CEO
THESE WERE INDIVIDUALLY
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| 00:35:59 |
Maloney, Carolyn - U.S. Representative, [D] New York
UNDERWRITTEN TRANSACTIONS, VERY CAREFULLY -- AND MAYBE I CAN PROVIDE MORE BACKGROUND TO YOU, IF IT WOULD BE HELPFUL. >> IF THEY WERE CAREFULLY UNDERWRITTEN,...
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| 00:36:08 |
Sullivan, Martin J. - President and CEO
THEM? OUR FIRST PANEL
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| 00:36:10 |
Maloney, Carolyn - U.S. Representative, [D] New York
SAID WHEN YOU SECURITIZED FOR THE FIRST TIME,
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| 00:36:12 |
Sullivan, Martin J. - President and CEO
MAYBE THE SECOND TIME THEY HAD VALUE, BUT WHEN YOU GET TO THE SIXTH AND SEVENTH TIMES, THERE IS NO VALUE THERE. THAT IS WHAT THE FIRST PANEL SAID. AND...
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| 00:36:26 |
Maloney, Carolyn - U.S. Representative, [D] New York
INSURANCE ROLLS AND HAVE ANY COLLATERAL OR CAPITAL. >> MAYBE IT WOULD BE HELPFUL BECAUSE THE REST GENERALIZATION IN THE FIRST PANEL. MAYBE IT WOULD BE...
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| 00:36:53 |
Sullivan, Martin J. - President and CEO
BLAME ACCOUNTS FOR COMING FORWARD, LOOKING AT A PRODUCT, AND SAYING IT HAS NO VALUE, BECAUSE ABSOLUTELY
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| 00:37:00 |
Maloney, Carolyn - U.S. Representative, [D] New York
AT -- NO ONE IN THE ENTIRE WORLD WANTS TO BUY IT. IT IS NOT THEIR FAULT. HE WANTED TO SAY
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| 00:37:07 |
Sullivan, Martin J. - President and CEO
THERE
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| 00:37:08 |
Maloney, Carolyn - U.S. Representative, [D] New York
IS VALUE THERE WHEN THERE IS NONE? I BELIEVE IN FAIR MARKET VALUE. IF NO ONE WANTS TO BUY IT, I THINK THERE'S AN INDICATION THERE IS NOBODY THERE, THAT...
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| 00:37:58 |
Sullivan, Martin J. - President and CEO
ON THE PROBLEM. THERE HAVE BEEN MANY MEMOS FROM MANY EXECUTIVES SAYING THEY SHOULD CHANGE THE ACCOUNTING RULES AND SAY THERE IS VALUE
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| 00:38:06 |
Maloney, Carolyn - U.S. Representative, [D] New York
THERE WHEN THERE IS NONE. >> YOUR TIME IS EXPIRED. DO YOU WANT TO MAKE A COMMENT? >> MY ANSWER, SIR, WITH RESPECT, ONE OF THE UNINTENDED CONSEQUENCES...
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| 00:38:29 |
Waxman, Henry - U.S. Representative, [D] California
MARCH OF THIS YEAR, THE UNINTENDED CONSEQUENCES OF TRYING
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| 00:38:34 |
Sullivan, Martin J. - President and CEO
TO MARKET TO MARKET THESE ASSETS -- ONE OF THE KEY CONCERNS I HAD, WHICH AGAIN, MAYBE EDUCATIONAL, WAS THAT BACK, MANY YEARS AGO, THE MARKET EXPLODED....
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| 00:40:16 |
Waxman, Henry - U.S. Representative, [D] California
COMMENTS ABOUT NOT RELYING ON FANNIE MAE AND FREDDIE MAC. PEOPLE
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| 00:40:21 |
Sullivan, Martin J. - President and CEO
BY THE SECONDARY MORTGAGES. -- PEOPLE BYUY THESE SECONDARY MORTGAGES. >> YES. >>
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| 00:40:33 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
YOU ARE NOT RELYING ON THE FACTS THAT THIS GROUP WAS INSURING THEM AND HAD BOUGHT THEM. THAT HAD NOTHING -- LET ME TELL YOU WHERE I AM GOING WITH THIS....
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| 00:40:51 |
Sullivan, Martin J. - President and CEO
AIG WROTE TO CREDIT DEFAULTS SWAPS
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| 00:40:53 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
ON ABOUT 200 COLLATERALIZED DEBT OBLIGATIONS. ONLY A HANDFUL, HE SAYS OF THESE, WERE EXPOSED TO SUBPRIME MORTGAGES. HE SAYS AFTER HIS DEPARTURE FROM...
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| 00:41:52 |
Sullivan, Martin J. - President and CEO
DO THIS. YOU SAID YOU WERE NOT RELYING ON THE FACT THAT THEY WERE BROUGHT -- LOT -- RELYING ON THIS. THEY HAVE GOVERNMENT BACKING.
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| 00:42:01 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
IN THE 10 MONTHS BEFORE THE ALARM WHEN NOW, YOU WERE BUYING THESE UP, AND THAT IS BASICALLY WHAT PUT YOU INTO THESE CREDIT DEFAULTS WHAT. IN FACT, WITH...
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| 00:42:52 |
Sullivan, Martin J. - President and CEO
OF ONE REALISED LOSS. THEY ARE STILL HOLDING THEM. AT THE TIME, THIS EVALUATION CAN COME BACK.
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| 00:42:59 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
THESE
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| 00:43:01 |
Sullivan, Martin J. - President and CEO
CONTRACTS MATURE, AND THEY HAVEN'T AVERAGE TENURE OF FOUR YEARS OR FIVE YEARS, THE VALUATIONS WOULD COME BACK. >> [INAUDIBLE] >> I AM NOT SURE THEY ARE...
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| 00:43:30 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
NOT RELY ON OUR ACCOUNTS. WE HAD MAJOR REGULATORY ISSUES THAT DOMINATED THE FOCUS OF MY
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| 00:43:35 |
Sullivan, Martin J. - President and CEO
ATTENTION. I HAD TO NEGOTIATE WITH THE SEC , MY FRIENDS AT THE NEW YORK INSURANCE APART, AS WELL AS THE NEW YORK ATTORNEY GENERAL. WE WERE COMING UNGLUED....
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| 00:44:52 |
Waxman, Henry - U.S. Representative, [D] California
THERE HAS BEEN A
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| 00:44:55 |
Cummings, Elijah - U.S. Representative, [D] Maryland
CHANGE IN THE APPROACH TO COMPENSATION BENEFITS, BUT THE COMMITTEE HAS LEARNED A WEEK AFTER THE BAILOUT AIG'S BOARD
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| 00:45:09 |
Sullivan, Martin J. - President and CEO
HELD
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| 00:45:10 |
Cummings, Elijah - U.S. Representative, [D] Maryland
A WEEK LONG CONFERENCE AT AN EXCLUSIVE RESORT. ARE YOU FAMILIAR WITH THAT AT ALL? >> I AM NOT. >> THE RESORT IS A BEACH RESORT. WE HAVE SOME PICTURES....
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| 00:45:35 |
Willumstad, Robert B. - Chairman and CEO
THEY HAVE FIVE NIGHTS THAT THEY
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| 00:45:40 |
Cummings, Elijah - U.S. Representative, [D] Maryland
HAD A ROOM -- THE PRESIDENTIAL SUITE -- FOR $1,600. THEN THEY HAD FIVE NIGHTS WITH THESE NINE SUITES, SWANKY, ANOTHER $1,600 FOR FIVE NIGHTS. WE CONTACTED...
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| 00:47:27 |
Willumstad, Robert B. - Chairman and CEO
COULD YOU UNDERSTAND WHY TAXPAYERS WOULD BE UPSET? >>
|
| 00:47:30 |
Cummings, Elijah - U.S. Representative, [D] Maryland
OF COURSE. >>
|
| 00:47:32 |
Willumstad, Robert B. - Chairman and CEO
MR. SULLIVAN, I AM
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| 00:47:34 |
Cummings, Elijah - U.S. Representative, [D] Maryland
CURIOUS. WHAT ARE YOUR VIEWS ON THIS? >> OF IS THE, I SHARE HIS COMMENTS THERE. OBVIOUSLY, I LEFT THE COMPANY MANY MONTHS EARLIER.
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| 00:47:46 |
Willumstad, Robert B. - Chairman and CEO
IF I HAD SEEN A BILL
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| 00:47:48 |
Cummings, Elijah - U.S. Representative, [D] Maryland
LIKE THAT, I ASSURE YOU AS
|
| 00:47:50 |
Willumstad, Robert B. - Chairman and CEO
CEO, I WOULD HAVE HAD QUESTIONS.
|
| 00:47:54 |
Cummings, Elijah - U.S. Representative, [D] Maryland
WE HAD A UNIT THAT ORGANIZE CONFERENCES THAT WOULD
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| 00:47:59 |
Sullivan, Martin J. - President and CEO
OBVIOUSLY TRY TO GET THE BEST RATES IN MAJOR CONFERENCES WERE BEING HELD IN A PROPER LOCATIONS. THIS IS OBVIOUSLY SOME MONTHS LATER. >> YOU CAN UNDERSTAND...
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| 00:48:28 |
Cummings, Elijah - U.S. Representative, [D] Maryland
ONE OF THE EXPERTS EARLIER SAID IT WON TO MAKE SURE THESE THINGS DID NOT HAPPEN AGAIN.
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| 00:48:33 |
Sullivan, Martin J. - President and CEO
NOW THAT
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| 00:48:35 |
Cummings, Elijah - U.S. Representative, [D] Maryland
WE, THE TAXPAYERS OF AMERICA, ARE AUDITING THIS PROCESS -- WHAT KIND OF THINGS SHOULD BE PUT IN PLACE TO MAKE SURE THESE KINDS OF THINGS TO HAPPEN AGAIN?...
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| 00:48:44 |
Sullivan, Martin J. - President and CEO
YOU HAVE TO LOOK, AND WITH
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| 00:48:49 |
Cummings, Elijah - U.S. Representative, [D] Maryland
RESPECT, YOU NEED TO LOOK AT FOR WHAT PURPOSE IS THIS CONFERENCE BEEN USED? OBVIOUSLY, THE COMPANY AT THAT STAGE SHOULD COME THROUGH A TRANSITION. MAYBE...
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| 00:49:06 |
Sullivan, Martin J. - President and CEO
AS A MANAGER, YOU LOOK AT THE APPROPRIATENESS OF WHAT IS THE REASON FOR THE CONFERENCE, WHAT IS THE BENEFIT TO THE COMPANY, AND WHAT IS THE APPROPRIATE...
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| 00:49:41 |
Cummings, Elijah - U.S. Representative, [D] Maryland
I WAS NOT AWARE. >> IN A WEEK? >> I WAS NOT AWARE, AND THAT WOULD PREVENT IT FROM HAPPENING. --
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| 00:49:51 |
Willumstad, Robert B. - Chairman and CEO
AND I WOULD HAVE PREVENTED IT FROM HAPPENING. >>
|
| 00:49:57 |
Cummings, Elijah - U.S. Representative, [D] Maryland
THANK YOU. ONE OF THE BIG FRUSTRATIONS FOR ANYONE WATCHING THIS ACROSS
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| 00:50:02 |
Willumstad, Robert B. - Chairman and CEO
AMERICA IS THAT
|
| 00:50:03 |
Cummings, Elijah - U.S. Representative, [D] Maryland
BOTH OF YOU USED THE TERM
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| 00:50:08 |
Willumstad, Robert B. - Chairman and CEO
MARKET-DRIVEN, FINANCIAL TSUNAMI, AS IF YOU WERE NOT PART OF IT. YOU HAVE ANY RESPONSIBILITY FOR WHAT HAPPENED IN OUR ECONOMY? WHEN THE HUGE COMPANY
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| 00:50:17 |
Souder, Mark Edward - U.S. Representative, [R] Indiana
THAT THE TAXPAYERS NOW BETWEEN -- $61 BILLION AND -- YOU FEEL YOU HAVE ANY PERSONAL RESPONSIBILITY? MR. SULLIVAN? >> OBVIOUSLY, SIR, I TAKE RESPONSIBILITY...
|
| 00:50:48 |
Sullivan, Martin J. - President and CEO
TENURE, SOMEWHERE BETWEEN JULY AND SEPTEMBER, YOUR COMPANY LOST $61 BILLION THAT YOU HAD TO BE BAILED OUT. YOU ARE CLAIMING THAT THE ACCOUNTING RULE,
|
| 00:51:00 |
Souder, Mark Edward - U.S. Representative, [R] Indiana
WHICH WAS A LOT -- IT WAS A MATTER OF INTERPRETATION -- BASICALLY DOES NOT AGREE WITH HOW IT WAS IN FORCE. THAT WAS LAW ENFORCEMENT. QUITE FRANKLY, WHAT...
|
| 00:51:53 |
Sullivan, Martin J. - President and CEO
IF YOUR INSURANCE BUSINESS IS IN GOOD SHAPE, THIS MEANS THIS IS CONCENTRATED IN YOUR FINANCIAL SERVICES DIVISION.
|
| 00:52:00 |
Souder, Mark Edward - U.S. Representative, [R] Indiana
AND THAT IS ALSO INVESTING ASSETS AND CHOSE NOT TO INVEST IN RISKY ASSETS THAT DID NOT YIELD AS MUCH, BUT WERE LESS
|
| 00:52:09 |
Willumstad, Robert B. - Chairman and CEO
RISKY. IS THAT NOT TRUE, OR HOW TO
|
| 00:52:14 |
Souder, Mark Edward - U.S. Representative, [R] Indiana
EXPLAIN HOW ONE DIVISION COULD HAVE A SHORT PERIOD TIME OF $61 BILLION OF TAX INVESTMENT, AND THE OTHER DIVISION DOES NOT NEED IT. 11 DIVISION ALSO INVEST...
|
| 00:53:10 |
Sullivan, Martin J. - President and CEO
DETERMINED THE CREDIT QUALITY WAS CHANGING IN THE PRICING OF THESE -- >> LET ME CLARIFY. ARE YOU SAYING THAT THE $61 BILLION THAT WE WOULD THEN WERE...
|
| 00:53:36 |
Souder, Mark Edward - U.S. Representative, [R] Indiana
DUI CONTENDED THAT THAT IS TO RESCUE LOSSES THAT WERE PRE- 2005? OR DOES IT COME FROM QUESTIONABLE DECISIONS BETWEEN 2005 AND 2008? DO YOU HAVE ANY...
|
| 00:53:49 |
Sullivan, Martin J. - President and CEO
YOU WERE MAKING PROFITS. A
|
| 00:53:53 |
Souder, Mark Edward - U.S. Representative, [R] Indiana
LITTLE BIT AGO, YOU SAID YOU WERE MAKING PROFITS AND YOU HAD NOT LOST ANY MONEY. YOU HAD A SHELL THAT WAS ANCHORED IN A LESS THAN SECURED MORTGAGES...
|
| 00:56:04 |
Sullivan, Martin J. - President and CEO
THE TSUNAMI THAT OTHERS HAVE REFERRED TO -- IT WAS THE EQUIVALENT OF A FINANCIAL PEARL HARBOR. MUCH MORE INTELLIGENT PEOPLE THAN I. THERE WERE MANY...
|
| 00:57:46 |
Maloney, Carolyn - U.S. Representative, [D] New York
BAILED OUT, THE
|
| 00:57:50 |
Davis, Thomas "Tom" M. - U.S. Representative, [R] Virginia
SHAREHOLDERS TAKE A BATH. FRANKLY, GIVEN THE DECISION THAT WERE MADE, YOU DESERVED TO FAIL. IT IS, I THINK, FOR A LOT OF US PUZZLING WHY YOU WERE SINGLED...
|
| 00:58:42 |
Maloney, Carolyn - U.S. Representative, [D] New York
WE HAVE TAKEN STEPS, UNPRECEDENTED CIRCUMSTANCES WITH THE UNPRECEDENTED STEPS. WE INTERFERED IN THE FREE- MARKET. WE BAIL OUT WALL STREET. THE MARKET...
|
| 00:59:01 |
Kucinich, Dennis - U.S. Representative, [D] Ohio
STREET JOURNAL." I THINK WHAT THIS DOES IS IT RAISES QUESTIONS AS TO WHETHER IT WAS WISE FOR THE GOVERNMENT TO INTERVENE DIRECTLY IN THE MARKETS AND WHETHER...
|
| 01:03:28 |
Sullivan, Martin J. - President and CEO
WAS AIG BAILED OUT WHEN LEHMAN
|
| 01:03:31 |
Kucinich, Dennis - U.S. Representative, [D] Ohio
BROTHERS WAS ALLOWED TO FAIL? >> I AM NOT SURE WHY LEHMAN BROTHERS WAS ALLOWED TO FAIL.
|
| 01:03:36 |
Sullivan, Martin J. - President and CEO
THERE WERE CONSEQUENCES TO THE FINANCIAL SYSTEM IF AIG FAILED THAT WERE VERY SIGNIFICANT. >>
|
| 01:03:44 |
Kucinich, Dennis - U.S. Representative, [D] Ohio
MY TIME HAS EXPIRED, MADAM. >> THE CHAIR RECOGNIZES THE CONGRESSMAN FROM CALIFORNIA FOR FIVE MINUTES. >> THANK YOU, MADAME CHAIR.
|
| 01:03:54 |
Willumstad, Robert B. - Chairman and CEO
I AM NOT GOING TO ASK YOU GENTLEMEN FOR PREPARED STATEMENTS THAT SOMEBODY ELSE WROTE UP BEFORE THIS HEARING. I'M GOING
|
| 01:04:06 |
Kucinich, Dennis - U.S. Representative, [D] Ohio
ASK QUESTIONS THE RESPONSE YOUR TESTIMONY.
|
| 01:04:09 |
Maloney, Carolyn - U.S. Representative, [D] New York
WE THROW AROUND TERMINOLOGIES.
|
| 01:04:13 |
Bilbray, Brian P. - U.S. Representative, [R] California
SOMEONE BORN AND RAISED ON THE OCEAN, SPEND SOME TIME ON THE WATER MYSELF, I FIND IT FUNNY THAT WE USE TERMINOLOGY LIKE TSUNAMI. WE CANNOT USE PLAIN LANGUAGE....
|
| 01:06:33 |
Sullivan, Martin J. - President and CEO
WHAT HAS
|
| 01:06:35 |
Bilbray, Brian P. - U.S. Representative, [R] California
CONTRIBUTED
|
| 01:06:37 |
Sullivan, Martin J. - President and CEO
HAS IMPACTED THE GLOBAL FINANCIAL ECONOMY, AND THAT IS INAPPROPRIATE BORROWING AND LENDING. THAT CORRELATES YOUR ANALOGY OF FANNIE MAE AND FREDDIE MAC...
|
| 01:07:17 |
Bilbray, Brian P. - U.S. Representative, [R] California
WE DEVELOPED A CONCEPT BASED ON THE ENRON MODEL. WOULD YOU AGREE THAT WHEN IT APPLIES TO MORTGAGE-BACKED SECURITIES, WHEN THERE IS REAL ESTATE INVOLVED,...
|
| 01:08:14 |
Willumstad, Robert B. - Chairman and CEO
I CAN GIVE AN EXAMPLE. IT IS
|
| 01:08:17 |
Sullivan, Martin J. - President and CEO
LIKE OWNING AN APARTMENT BLOCK. THE VALUATION OF THE UPPER ARM OF WHAT GOES UP AND DOWN. IF YOU'RE THE OWNER OF THAT BUILDING, YOU HAVE GOT TO FILL ...
|
| 01:09:39 |
Bilbray, Brian P. - U.S. Representative, [R] California
CRITICISM OF THE RULE. IT WAS A CONSEQUENCE THAT I AM BRINGING TO THE ATTENTION OF CONGRESS AND THE SEC TO AT LEAST TAKE A LOOK AT. >> THE GENTLEMAN'S...
|
| 01:09:59 |
Sullivan, Martin J. - President and CEO
FAULT. IT OCCURRED AFTER HIS WATCH. MR. SULLIVAN, YOU SAY NO MISTAKES WERE MADE. MR. WILLUMSTAD, YOU SAY
|
| 01:10:10 |
Waxman, Henry - U.S. Representative, [D] California
THAT AIG COULD NOT PERFORMED DIFFERENTLY. AS LEADERS OF
|
| 01:10:14 |
Tierney, John - U.S. Representative, [D] Massachusetts
THE COMPANY, YOU THINK YOU WOULD HAVE SEEN WHAT THE RISKS WERE AND HAVE ASSESSED THEM. WE LOOK AT THE ETERNAL -- INTERNAL MINUTES FROM YOUR DEPARTMENT...
|
| 01:12:58 |
Willumstad, Robert B. - Chairman and CEO
TO ISSUE FINANCIAL'S 40,000 --
|
| 01:13:02 |
Tierney, John - U.S. Representative, [D] Massachusetts
FINANCIALS FOR 2007. >>
|
| 01:13:04 |
Sullivan, Martin J. - President and CEO
YOU EXPECT MANAGEMENT TO BE AHEAD OF THE CURVE. THE SALARIES THAT YOU GENTLEMEN PULL DOWN, BUT THAT INDICATES THAT YOU ANTICIPATE THOSE THINGS. YOU PUT...
|
| 01:13:29 |
Tierney, John - U.S. Representative, [D] Massachusetts
IS A CONTINUING THEME HERE. MR. CHAIRMAN, I WOULD LIKE TO ENTER INTO A CONSENT AUDIT MINUTES AS WELL AS THE LETTER FROM MARCH 10, 2008 INTO THE RECORD....
|
| 01:14:17 |
Waxman, Henry - U.S. Representative, [D] California
I APPRECIATE THAT. THESE ARE
|
| 01:14:21 |
Sullivan, Martin J. - President and CEO
REPORTS FROM JANUARY AND FEBRUARY OF MARCH 2008. OBVIOUSLY, NOT ENOUGH HAD HAPPENED TO SETTLE THE QUALMS OF THE REGULATORS. I THINK IT SHOWS SOME MANAGEMENT...
|
| 01:14:39 |
Tierney, John - U.S. Representative, [D] Massachusetts
WORKING FOR YOU ALERTING YOU TO THESE PROBLEMS, THERE WERE TRYING TO GET THROUGH IN NOVEMBER 2007. NEITHER OF YOU REMEMBER HIM COMPLAINING OR KNOW ANYTHING...
|
| 01:14:59 |
Waxman, Henry - U.S. Representative, [D] California
THANK YOU, MR. CHAIRMAN. YESTERDAY WE HAD A HEARING CONCERNING LEHMAN BROTHERS. THERE WAS THE DISCUSSION THAT LEHMAN BROTHERS HAD IT'S OWN SUBPRIME LANDER....
|
| 01:15:20 |
Turner, Michael R. - U.S. Representative, [R] Ohio
MORTGAGE-BACKED SECURITIES. I AM NOT CERTAIN THAT -- DID YOU ALSO HAVE A LENDING FUNCTION OF SUBPRIME MORTGAGES? ALSO, THEN, DID YOU PACKAGE LOANS? IN...
|
| 01:16:04 |
Sullivan, Martin J. - President and CEO
NOW WAS, UNFORTUNATELY, AIG DID NOT PARTICIPATE IN THE MORE EXOTIC MORTGAGE PRODUCTS DURING A PERIOD TIME. THEY DID NOT PARTICIPATE IN
|
| 01:16:15 |
Turner, Michael R. - U.S. Representative, [R] Ohio
LENDING IN WHAT WERE DEEMED TO BE THE HOT MARKETS THAT WE HAVE NOW DISCOVERED.
|
| 01:16:23 |
Sullivan, Martin J. - President and CEO
SO WHILE THE RESULTS HAVE NOT BEEN AT THE LEVEL WE WOULD NORMALLY EXPECT THEM TO BE, THEY HAVE NOT BEEN AS BAD AS OTHERS IN THE INDUSTRY. >> YOU WERE...
|
| 01:16:53 |
Turner, Michael R. - U.S. Representative, [R] Ohio
AGAIN, THESE ARE SUPERSENIOR CREDIT DEFAULTS.
|
| 01:16:58 |
Sullivan, Martin J. - President and CEO
THESE ARE TRANSACTIONS AIG
|
| 01:17:02 |
Turner, Michael R. - U.S. Representative, [R] Ohio
PURGES DATED HIM. THEY ARE -- WE HAVE MADE FULL DISCLOSURE ON THIS. WE HAVE BEEN COMPLEMENTED BY THE INVESTMENT COMMUNITY AND OTHERS BY THE DISCLOSURE...
|
| 01:17:16 |
Sullivan, Martin J. - President and CEO
WE WERE IN -- AND EFFECTIVELY ENSURING THE SUPERSENIOR LEVEL OF THE TRANSACTION. THERE ARE BONDS, CDO'S BELOW THAT. THEN THERE IS ANOTHER LAYER OF PROTECTION...
|
| 01:18:15 |
Turner, Michael R. - U.S. Representative, [R] Ohio
THE VALUE OF ALONE EXCEEDED THE VALUE OF THE HOUSE. ULTIMATELY, THIS CAUSES THE HOMEOWNERS TO GET INTO TROUBLE. SOMETIMES IT IS FINANCIAL CIRCUMSTANCES...
|
| 01:21:12 |
Sullivan, Martin J. - President and CEO
WHY A IG WAS BAILED OUT AND NOT LEHMAN, I AM GOING TO ASK A DIRECT QUESTION. .
|
| 01:21:18 |
Waxman, Henry - U.S. Representative, [D] California
GOLDMAN SACHS HAVE ANYTHING TO LOSE IF AIG WENT UNDER? >> GOLDMAN SACHS WAS A SIGNIFICANT COUNTERPARTY FOUR A I
|
| 01:21:32 |
Yarmuth, John - U.S. Representative, [D] Kentucky
G. >> TO WHAT EXTENT ARE THE RELATIONSHIPS ENTER TWINED -- INTERTWINED? >> I CANNOT
|
| 01:21:48 |
Willumstad, Robert B. - Chairman and CEO
TELL YOU WHAT LOSSES GOLDMAN SACHS MIGHT HAVE SUFFERED, BECAUSE I DON'T KNOW.
|
| 01:21:55 |
Yarmuth, John - U.S. Representative, [D] Kentucky
GOLDMAN SACHS WAS A COUNTERPARTY ON ITS APPROXIMATELY $20 BILLION WORTH OF CREDIT DEFAULTS WOPS. MEMO -- SWAPS. >>
|
| 01:22:10 |
Willumstad, Robert B. - Chairman and CEO
I DO NOT WANT TO JUMP TO THAT CONCLUSION. I DO NOT HOW THOSE SECURITIES WERE CARRIED ON GOLDMAN SACHS BOOKS AND I DON'T KNOW IF THERE WERE STAGED BY...
|
| 01:22:32 |
Unidentified Speaker, -
TO FAIL. THERE WAS A QUESTION OF WHETHER WE LET COMPANIES GET TOO BIG. BY YOUR OWN ADMISSION IN THIS CASE, THE
|
| 01:22:48 |
Yarmuth, John - U.S. Representative, [D] Kentucky
IMPLICATION OF A I GEE'S FAILURE ON THE MARKETS WOULD BE SUBSTANTIAL. IS THIS SOMETHING THAT TROUBLES YOU? THE COMPANIES ARE ABLE TO REACH THE SIZE OR...
|
| 01:24:36 |
Unidentified Speaker, -
ALSO THE ABILITY TO PROVIDE A COMPETITIVE MARKETPLACE
|
| 01:24:47 |
Willumstad, Robert B. - Chairman and CEO
SOME POLICYHOLDERS CAN GET A GOOD DEAL, IF YOU WILL, THAT AIG WAS A WELL CAPITALIZED INSURANCE OPTION THAT PROVIDED MINIVAN -- BENEFITS TO ITS CONSUMERS...
|
| 01:25:26 |
Yarmuth, John - U.S. Representative, [D] Kentucky
COMPETITIVE PRICING OR WHATEVER, ADEQUATE TO JUSTIFY THE RISK OF A COMPANY MAKING A MISTAKE AND DISRUPTING THE ENTIRE ECONOMY. JUST A CRUISE -- QUICK...
|
| 01:26:33 |
Willumstad, Robert B. - Chairman and CEO
AGAIN, THE LOAN WAS TAKEN AFTER I LEFT THE COMPANY SO I CANNOT BE SPECIFIC. WHAT HAPPENS IN A CRISIS OF CONFIDENCE AND WHAT HAPPENED TO AIG, THEY HAD...
|
| 01:28:31 |
Waxman, Henry - U.S. Representative, [D] California
THE $85 BILLION THAT HAS BEEN GIVEN TO BAIL OUT. AS I UNDERSTAND IT LAST FRIDAY, AIG HAD REPORTED IT HAD ALREADY DRAWN DOWN $61
|
| 01:28:45 |
Watson, Diane - U.S. Representative, [D] California
BILLION OF THE $85 BILLION LOAN. DOES THAT LAND ITSELF TO WHAT YOU WERE JUST DESCRIBING, THAT PEOPLE WANT THEIR MONEY NOW? >> AGAIN, I DON'T KNOW WHAT...
|
| 01:29:20 |
Willumstad, Robert B. - Chairman and CEO
A IG AGAIN. BACK ON SEPTEMBER 16TH, AIG STATED THE BAIL OUT WOULD PREVENT FURTHER RATING DOWNGRADES. WE KNOW THAT YOU ARE NOT AT THE
|
| 01:29:34 |
Watson, Diane - U.S. Representative, [D] California
COMPANY ANYMORE, AND I AM SURE YOU ARE SURPRISED BY HOW QUICKLY THE $85 BILLION LINE OF CREDIT HAS BEEN CONSUMED. ONE QUESTION THAT MY CONSTITUENTS AND...
|
| 01:30:28 |
Willumstad, Robert B. - Chairman and CEO
CEO OF AIG SUGGESTED THAT THEY MIGHT TAKE A PIECE OF THE $700 BILLION BAILOUT PACKAGE. THAT WOULD BE IN EDITION TO THE $85 BILLION THAT AIG ALREADY RECEIVED....
|
| 01:30:52 |
Watson, Diane - U.S. Representative, [D] California
THOSE TO LOOK FORWARD DOWN THE ECONOMIC ROAD, WHEN WILL THIS END? WILL IT END? HOW MUCH ARE WE GOING TO HAVE TO SPEND OF THE TAXPAYERS' MONEY AIG MONEY...
|
| 01:31:40 |
Unidentified Speaker, -
AIG EMPLOYER. THE MAN WE'RE TALKING ABOUT -- MR. CASANO.
|
| 01:31:57 |
Braley, Bruce - U.S. Representative, [D] Iowa
I AM QUOTING TO YOU FROM A SEPTEMBER 28TH, 2008 ARTICLE IN THE NEW YORK TIMES WHICH ATTRIBUTES OF THIS COMMENT TO HIM IN AUGUST OF 2007. IT IS HARD FOR...
|
| 01:34:12 |
Willumstad, Robert B. - Chairman and CEO
THAT ACTION DID YOU? >> THAT IS CORRECT. >> MR. CHAIRMAN, I AM
|
| 01:34:18 |
Braley, Bruce - U.S. Representative, [D] Iowa
GOING TO OFFER AS PART OF THE RECORD THE CONSULTING AGREEMENT WHICH PROVIDES THE CEO OF AIG TO TERMINATE THE CONSULTING AGREEMENT FOR CAUSE. I THINK...
|
| 01:34:35 |
Sullivan, Martin J. - President and CEO
JUSTIFICATION BASED ON THE MISREPRESENTATIONS
|
| 01:34:38 |
Braley, Bruce - U.S. Representative, [D] Iowa
MADE BY THE FINANCIAL PERIL HE CREATED FOR THIS LONG-STANDING COMPANY OF GREAT REPUTATION, THAT OPTION SHOULD HAVE BEEN EXERCISED AND SOMETHING SHOULD...
|
| 01:36:37 |
Waxman, Henry - U.S. Representative, [D] California
AGAIN, I WAS NOT THE CEO AT THE TIME.
|
| 01:36:43 |
Unidentified Speaker, -
MR. SULLIVAN HAD RECOMMENDED TO THE BOARD AND COMPENSATION COMMITTEE THAT HIS ASSISTANCE IN HELPING UNWIND IF YOU WILL OR WORK AND DOWN THE EXPOSURE WOULD...
|
| 01:37:02 |
Willumstad, Robert B. - Chairman and CEO
AGREEMENT, HE WOULD HAVE A NON COMPETE AGREEMENT. IT WAS IMPORTANT TO KEEP THE EXISTING EMPLOYEES IN FP TO WORK THROUGH -- >> >> WHY DIDN'T YOU FIRE HIM?...
|
| 01:37:50 |
Waxman, Henry - U.S. Representative, [D] California
MONTHS LATER. YOU WANT TO MAKE
|
| 01:37:53 |
Sullivan, Martin J. - President and CEO
SURE THAT THE EMPLOYEES THAT WE RETAIN AN INTELLECTUAL KNOWLEDGE. >> HE PUT YOU IN A SITUATION WHERE YOU HAD TO COME UP WITH $60 BILLION IMMEDIATELY...
|
| 01:38:27 |
Waxman, Henry - U.S. Representative, [D] California
I MADE THE DECISION THAT HIS SERVICES BE RETAINED. >> WHEN I RETIRE I WANT TO COME TO WORK FOR YOU AT A MILLION DOLLARS A MONTH. WHAT A GREAT DEAL...
|
| 01:38:45 |
Sullivan, Martin J. - President and CEO
OUT ON HIS OWN IN THESE DERIVATIVE DEALS THAT BRING DOWN AIG, AND HE GETS $1 MILLION A MONTH RETAINER IN CASE YOU NEED HIS ADVICE. >>
|
| 01:38:58 |
Waxman, Henry - U.S. Representative, [D] California
MR. WILLIAMS ARTICULATED ALL THE REASONS THAT HE HAD A NON COMPETE SO WE COULD RETAIN THE KEY EMPLOYEES. BEARING IN MIND THESE ARE MULTI- YEAR CONTRACT....
|
| 01:39:23 |
Sullivan, Martin J. - President and CEO
I WOULD LIKE TO ASK BOTH OF YOU QUESTIONS ABOUT YOUR STATEMENTS AS THE COMPANY WAS COLLAPSING. IT DID NOT FALL SUDDENLY. MR. SULLIVAN, YOU FIRST.
|
| 01:39:42 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
IN DECEMBER 2007, YOU SAID THE FOLLOWING. WE BELIEVE WE HAVE THE BUSINESS PLATFORM WITH GREAT PROSPECTS THAT REPRESENT GREAT VALUE. THEN YOU POSTED A...
|
| 01:41:41 |
Sullivan, Martin J. - President and CEO
THEY HAVE MARKET LEADING POSITIONS. >> THERE WERE THE CREDIT DEFAULT SWAPS. >> I AM TRYING TO CLARIFY MY REMARKS. ONE IS IN REFERRING TO THE CORE FRANCHISE...
|
| 01:42:14 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
THE REALIZED LOST POTENTIAL OF THAT PORTFOLIO AS AGAINST THE UNREALIZED
|
| 01:42:19 |
Sullivan, Martin J. - President and CEO
LOSS ESSENTIALLY. AS I MENTIONED EARLIER, AT THE TIME I LEFT THE COMPANY TO THE VERY BEST OF MY KNOWLEDGE AT THE END OF THE FIRST QUARTER. I DON'T BELIEVE...
|
| 01:43:17 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
SITUATION WHERE THE POTENTIAL WHY IT REALIZED SITUATION. >> WHEN YOU PARSE YOUR WORD THIS WAY YOU MIGHT BE MISLEADING YOUR SHAREHOLDERS? >> ABSOLUTELY...
|
| 01:43:33 |
Sullivan, Martin J. - President and CEO
THERE WERE MANY DISCLOSURES OF OUR MORTGAGE
|
| 01:43:45 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
INSURANCE COMPANY, WHICH WAS CAUSING ME SOME
|
| 01:43:49 |
Sullivan, Martin J. - President and CEO
CONCERN WHEN THE ISSUE WAS -- >>
|
| 01:43:52 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
ARE YOU SAYING TO ME THAT YOU BELIEVED YOUR SHAREHOLDERS EXPECTED TO BE BAILED OUT BY THE FEDERAL
|
| 01:44:00 |
Sullivan, Martin J. - President and CEO
GOVERNMENT AT SOME POINT? >> CERTAINLY NOT. WHEN I LEFT THE COMPANY, I BELIEVE THE COMPANY WHERE IS IN -- WAS IN A POSITION WHERE IT WOULD NOT NEED...
|
| 01:44:16 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
DISCLOSURE, ONE OF THE THINGS I SET OUT TO DO IN MARCH 2005 GIVEN THE CHALLENGES THAT WE HAD
|
| 01:44:23 |
Sullivan, Martin J. - President and CEO
WITH OUR REGULATORS. WHEN I TOOK OFFICE, AIG WAS FACING CRISES DIFFERENT FROM THE FINANCIAL CRISIS. WE WERE GOING TO HAVE A VERY OPEN AND TRANSPARENT...
|
| 01:45:09 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
AND UNREALIZED LOSSES. >> IN CONCLUSION, IT IS DIFFICULT FOR ME TO
|
| 01:45:20 |
Sullivan, Martin J. - President and CEO
BELIEVE THAT SHAREHOLDERS WERE NOT MISLED. THE WAY IN WHICH YOU PARCH YOUR -- PARSE YOUR WORDS AND EXPLAIN THE CONDITION OF YOUR COMPANY. >>
|
| 01:45:38 |
Norton, Eleanor Holmes - Congressional Delegate, [D] District of Columbia
THANK YOU, MR. CHAIRMAN. I WANT TO FOLLOW UP ON SOME OF THE QUESTIONS REGARDING EXECUTIVE COMPENSATION, INCLUDING THE BONUS STRUCTURE. LET ME START...
|
| 01:46:00 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
TO DOCUMENTS THAT THIS COMMITTEE HAS RECEIVED, AIG HAS TWO BONUS PROGRAMS CAROLINA QUESTIONS, PLANS. IT COVERS THE TOP 700 AIG EXECUTIVE. THE SENIOR...
|
| 01:46:43 |
Sullivan, Martin J. - President and CEO
WHAT WAS SUPPOSED TO HAPPEN IN 2007 AND AS A RESULT
|
| 01:46:48 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
OF THE DISASTROUS FOURTH QUARTER RESULTS IN 2007, BONUSES UNDER BOTH OF THOSE PLANS WOULD HAVE BEEN CUT UNDER THE NORMAL RULES. BUT ACCORDING TO THE...
|
| 01:48:28 |
Sullivan, Martin J. - President and CEO
BELIEVE EXISTED UNDER BOTH PROGRAM. MY CONCERN WAS THAT THE 700 PEOPLE THAT PARTICIPATED IN THE PARTNERS PLAN AND THE SENIOR PARTNERS PLAN, NONE OF THEM...
|
| 01:49:36 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
YOU NOT? THE QUESTION IS CLEAR. YOUR COMPANY HAD JUST TAKEN A RECORD LOSS. PAY FOR
|
| 01:49:43 |
Sullivan, Martin J. - President and CEO
PERFORMANCE IS SUPPOSED TO BE BASED ON HOW THE COMPANY PERFORMS AND YET YOU WENT BEFORE THE BOARD OF DIRECTORS AND SPECIFICALLY ASK THEM TO IGNORE THOSE...
|
| 01:49:54 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
COMPENSATION, HAD THE DIRECT RESULT OF GIVING YOU $5.4 MILLION EXTRA COMPENSATION. IF I COULD JUST ASK YOU THE MINUTE SAY YOU WERE PRESENT AT THIS...
|
| 01:50:48 |
Willumstad, Robert B. - Chairman and CEO
EXCEPTIONAL YEAR. MR. SULLIVAN'S BONUS WAS REDUCED IN 2007 FROM $9 MILLION TO TWO $0.5 MILLION. -- FROM $2.5 MILLION. >> WITH RESPECT TO THE SENIOR...
|
| 01:51:27 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
PLAN WAS A PLAN THAT RECOGNIZE THE PERFORMANCE OVER A THREE-YEAR TIME. BUT2007 WAS ONE OF THOSE YEARS. MR. SULLIVAN'S RECOMMENDATION WAS TO POSTPONE...
|
| 01:51:48 |
Willumstad, Robert B. - Chairman and CEO
AND THE BOARD HAD AS MR. SULLIVAN MENTIONED, THERE WERE 70 EMPLOYEES WHO WERE PART OF THE SENIOR PARTNERS PLAN, NONE OF WHICH HAD ANYTHING TO DO WITH...
|
| 01:52:42 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
SCHEME AND IN THE BAD TIMES IN GETS REINTERPRETED THE WAY IT BENEFITS EXECUTIVES. >> SO I CAN GET THIS STRAIGHT, YOU ARE THE CEO OF THE ENTIRE COMPANY....
|
| 01:53:14 |
Waxman, Henry - U.S. Representative, [D] California
THE LOSSES SO THAT THAT THREE-YEAR BONUS COULD BE REDUCED. IT IS OUR RIGHT? >>
|
| 01:53:22 |
Sullivan, Martin J. - President and CEO
WHEN I RECOGNIZE -- RECOMMENDED
|
| 01:53:25 |
Waxman, Henry - U.S. Representative, [D] California
TO THE COMPENSATION COMMITTEE FOR THE PURPOSE OF THE SENIOR PARTNERS PLAN AND THE PARTNERS PLAN THAT THEY USE THEIR DISCRETION IN THE CALCULATION OF...
|
| 01:53:43 |
Sullivan, Martin J. - President and CEO
IS AND IT ALSO AIG THE ALSO AIGFP CHANGED THE RULES AS WELL? THE BONUSES THERE DID NOT CALCULATE THE LOSSES?
|
| 01:53:57 |
Waxman, Henry - U.S. Representative, [D] California
UNREALIZED AS THEY MAY HAVE BEEN? >> I DON'T THINK THAT IS CORRECT. >>
|
| 01:54:01 |
Sullivan, Martin J. - President and CEO
HAVE A DOCUMENT
|
| 01:54:04 |
Waxman, Henry - U.S. Representative, [D] California
THAT SAYS SO. THIS IS THE MINUTES OF THE MEETING OF THE COMPENSATION BOARD OF DIRECTORS, AND IT SAYS
|
| 01:54:20 |
Willumstad, Robert B. - Chairman and CEO
EXPLAIN
|
| 01:54:24 |
Waxman, Henry - U.S. Representative, [D] California
AIG PRESENTED MANAGEMENT'S RECOMMENDATION AND EXPLAINED THAT MANAGEMENT BELIEVES IT IS CRITICAL TO PROVIDE AN IN ASCENSION -- INCENTIVES FOR THE TEAM...
|
| 01:55:39 |
Sullivan, Martin J. - President and CEO
I
|
| 01:55:41 |
Waxman, Henry - U.S. Representative, [D] California
DON'T HAVE A SCHEDULE IN FRONT OF ME. >> WE LIKE TO GET IT FOR THE RECORD.
|
| 01:55:46 |
Unidentified Speaker, -
LET ME TELL YOU ABOUT ONE PERSON THAT DID NOT GET A BONUS.
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| 01:55:49 |
Sullivan, Martin J. - President and CEO
MR. ST. DENNIS.
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| 01:55:52 |
Waxman, Henry - U.S. Representative, [D] California
HE TRIED TO ALERT THE TWO OF YOU TO THE FACT YOU ARE RUNNING INTO BIG PROBLEMS.
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| 01:56:05 |
Unidentified Speaker, -
THE ONE GUY WHO WAS TRYING TO DO HIS JOB AND THERE MAY HAVE BEEN OTHERS AS WELL LOST OUT ON THE BONUS COMPLETELY AND WAS FRUSTRATED AND FELT HE COULD...
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| 01:57:17 |
Unidentified Speaker, -
REALLY QUITE A GOOD DEAL. >> PASS AS CEO YOU OVERSAW THE WHOLE FP DIVISION AS WELL. AND YET YOU RECEIVE A BONUS DESPITE THE FACT THAT THEY HAD THESE...
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| 01:57:43 |
Van Hollen, Christopher - U.S. Representative, [D] Maryland
THANK YOU, MR. CHAIRMAN. I AM JUST FASCINATED BY THIS FACT, JOSEPH CASANO. IT APPEARS TO ME THAT HE SINGLE- HANDEDLY BROUGHT AIG TO ITS KNEES.
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| 01:58:11 |
Sarbanes, John P. - U.S. Representative, [D] Maryland
IS YOUR OFFICE IN NEW YORK? AND HIS OFFICE WAS IN LONDON? >> KEYS AND HIS TIME BETWEEN LONDON AND CONNECTICUT. >> HOW OFTEN WOULD YOU SEE HIM? >> AT...
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| 01:58:50 |
Sullivan, Martin J. - President and CEO
REPORTED TO MR. -- WHO WAS REFERENCED EARLIER. >>
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| 01:58:57 |
Sarbanes, John P. - U.S. Representative, [D] Maryland
YOU'RE NOT HITTING THE COMPANY UP WHEN THIS HAPPENED?
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| 01:59:05 |
Sullivan, Martin J. - President and CEO
WHAT IS THE COMPANY IDEA ON HOW THAT HAPPENED? DID MR. HOW CASANO SAY I HAVE THIS REALLY NEED IDEA OF WHAT WE CAN DO OVER IN LONDON? WE CAN GET INTO...
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| 01:59:23 |
Sarbanes, John P. - U.S. Representative, [D] Maryland
LINE? >> FROM WHAT I KNOW IS A NUMBER OF EXECUTIVES CAME OF DREXEL AND RECRUITED AT THAT TIME. I DON'T BELIEVE HE WAS LEADING THAT AT THE TIME. THERE...
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| 01:59:51 |
Sullivan, Martin J. - President and CEO
MR. CASSANO HOSTILE INVESTORS IN DECEMBER 2007 READY TO PLAY THE POWER GAME. WITHIN WEEKS, AIG POSTS A LOSS OF $5.3 BILLION. I ASSUME MOST OF THAT RELATED...
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| 02:01:23 |
Sarbanes, John P. - U.S. Representative, [D] Maryland
WHAT HAS HAPPENED SINCE, I DON'T KNOW. >> $5.3 BILLION. YOU GET ON THE PHONE WITH MR. CASSANO AND YOU SAY WHAT IS GOING ON OVER THERE AT FP, RIGHT?...
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| 02:01:45 |
Sullivan, Martin J. - President and CEO
CATCHES HIM THE NEXT TIME HE IS IN TOWN FOR A MEETING AND
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| 02:01:52 |
Sarbanes, John P. - U.S. Representative, [D] Maryland
SAYS, $5.3 BILLION? UNREALIZED LOSSES FOR THE LAST QUARTER? WHAT IS HAPPENING OVER THERE MR. CASSANO. WHAT DOES HE SAY? DOES HE TELL YOU THE SAME THING...
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| 02:04:21 |
Unidentified Speaker, -
FREEZE AND SOME PRIME ISSUES CAME THROUGH, THEN COLOSSUS' HAPPEN. THEM OF THE GENTLEMAN'S TIME HAS EXPIRED. >> TO BOTH OF YOU THE JUDGMENT I WANT TO...
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| 02:04:37 |
Sullivan, Martin J. - President and CEO
SHOWN TODAY UNDER INTENSIVE QUESTIONING. I HAVE TO TELL YOU THAT YOU MAY A SHAME FULL PROFILE OF CORPORATE AMERICA. I WILL SAY THANK YOU FOR FORGOING
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| 02:04:52 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
YOUR GOLDEN PARACHUTE AND YOU MR. SULLIVAN, SHAME ON YOU. THE SHAREHOLDERS OF THAT COMPANY HAVE NOTHING AND YOU WALKED AWAY FROM WITH $15 MILLION. I...
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| 02:05:40 |
Willumstad, Robert B. - Chairman and CEO
SACHS AND J.P. MORGAN TOGETHER OUGHT TO FIND A PRIVATE SOLUTION TO
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| 02:05:49 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
AGEE'S LIQUIDITY ISSUES. THAT
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| 02:05:51 |
Willumstad, Robert B. - Chairman and CEO
MEETING WAS TO OPERAFIND OUT HOW MUCH THEY WOULD NEED. >> THEY WERE NOT INTERESTED IN A PRIVATE SOLUTION? THE CEO WAS NOT INTERESTED IN PURCHASING A...
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| 02:06:27 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
AND THAT THEY ARE OWED ABOUT $20 BILLION. >>
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| 02:06:36 |
Willumstad, Robert B. - Chairman and CEO
KNOW. AS A COUNTER
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| 02:06:42 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
PARTY, THE SECURITIES DEFAULTED AIG WOULD HAVE TO PAY THAT COUNTERPARTY, GOLDMAN SACHS, THE AMOUNT OF THE INSURANCE PREMIUM. >>
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| 02:06:57 |
Willumstad, Robert B. - Chairman and CEO
ABOUT $20 BILLION. YOU REFERENCE THAT AMOUNT OF MONEY. >> THAT IS THE CORRECT NUMBER. >> AIG HAS SINCE TAKEN A THE TAKE BEARS ON $61 BILLION. HAS ANY...
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| 02:07:17 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
GONE BACK TO GOLDMAN SACHS? >> MR. CHAIRMAN, I THINK THAT IS A
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| 02:07:22 |
Willumstad, Robert B. - Chairman and CEO
QUESTION YOU MAY WANT TO ASK. DO YOU BELIEVE THAT NAKED SHORT SELLING WAS PART
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| 02:07:27 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
OF THE PROBLEM? >> AIG STOCK WAS DOWN TO $26 AND GEN. UP
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| 02:07:41 |
Unidentified Speaker, -
UNTIL SEPTEMBER 12TH, AIG WAS AT 23. DURING THE COURSE OF LATE JUNE TO EARLY SEPTEMBER, THERE WAS NOT MUCH MOVEMENT
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| 02:07:55 |
Willumstad, Robert B. - Chairman and CEO
ON STOCK. IN THE LAST WEEK, STOCK WENT FROM 23 TO 24. I DON'T KNOW THAT IT WAS NECESSARILY TRUE THAT SHORT SELLERS -- ALTHOUGH THERE WAS SOME SHORT-SELLERS...
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| 02:08:45 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
DOWNGRADED AT THAT TIME. ON FRIDAY AFTER 4:00 P.M., S&P PUT OUT AN - WATCH THAT INDICATED THEY MIGHT REDUCE THE RATINGS ANYWHERE FROM ONE-THREE NOTCHES....
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| 02:09:33 |
Unidentified Speaker, -
IN AUGUST OF 2007 HE SAYS IT WITHOUT BEING FLIPPANT TO EVEN SEE A SCENARIO WITHIN ANY KIND OF RUN OF REASON THAT WOULD SEE US LOSING $1
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| 02:09:44 |
Willumstad, Robert B. - Chairman and CEO
IN ANY OF THESE TRANSACTIONS. THAT IS A LOT OF BRAVADO.
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| 02:09:51 |
Speier, Karen Lorraine "Jackie" Jacqueline - U.S. Representative, [D] California
IN DECEMBER OF 2007 HE SAID, WE HAVE FROM TIME TO TIME GOTTEN COLLATERAL CALLS FROM PEOPLE AND THEN WE SAY TO THEM, WE DON'T AGREE WITH YOUR NUMBERS...
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| 02:11:15 |
Sullivan, Martin J. - President and CEO
ANY OF JOE'S COMMENTS OUT OF CONTEXT BUT WE HAVE PUT A LOT OF INFORMATION MADE AVAILABLE TO THE INVESTOR COMMUNITY AT THAT TIME. I NEED TO SEE THE SLIDES...
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| 02:13:00 |
Unidentified Speaker, -
THANK YOU FOR BEING HERE. THERE IS ONE THING I THINK THERE IS UNANIMITY
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| 02:13:06 |
Waxman, Henry - U.S. Representative, [D] California
ON. WE ARE TROUBLED BY THE COMPENSATION THAT HAS BEEN PAID TO EXECUTIVES WHO FRANKLY WE'RE NOT EXPERIENCING SUCCESS. WE DON'T THINK IT WAS EXECUTIVES...
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| 02:13:22 |
Shays, Christopher - U.S. Representative, [R] Connecticut
DEFAULTS AND SOME PRIME LOANS UNDERWRITTEN BY THE TOXIC TWINS FRANNIE AND FREDDIE GREW TO A TSUNAMI THAT HELP TO SWAMP LEHMAN BROTHERS INCLUDING AIG....
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| 02:14:47 |
Waxman, Henry - U.S. Representative, [D] California
ARE DOING AND AN INVESTIGATION SO THAT NO ONE GIVES MISINFORMATION. THAT WOULD BE TANTAMOUNT TO A CRIME IN ITSELF. >> THANK YOU. LET ME ASK YOU TO RESPOND....
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| 02:15:16 |
Shays, Christopher - U.S. Representative, [R] Connecticut
RETIRED WORK TO SOME PRIME MORTGAGES. AT ONLY A HANDFUL OF THE CREDIT DEFAULT SWAPS WRITTEN OVER THE SEVEN YEARS HAD ANY SOME PRIME EXPOSURE. LATER...
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| 02:16:01 |
Unidentified Speaker, -
EXPOSURES EARLY ON? OF >> I HAVE NOT DONE AN ANALYSIS AS TO WHAT THE PERCENTAGES WERE IN RESPONSE TO HIS STATEMENT. WHAT I CAN TELL YOU FROM THE RISK...
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| 02:16:12 |
Sullivan, Martin J. - President and CEO
IT WAS EXACTLY THE SAME PROCEDURES ARE WERE IN PLACE WHEN MR. GREENBERG WAS IN OFFICE.
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| 02:16:19 |
Shays, Christopher - U.S. Representative, [R] Connecticut
AT THAT TIME I WAS FOCUSED ON OTHER ISSUES. >> HE PROCEEDED YOU, CORRECT? >> YES. >> HE IS BLAMING YOU PRIMARILY FOR THE SHORT TIME THAT YOU WERE ...
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| 02:16:53 |
Unidentified Speaker, -
|
| 02:16:54 |
Sullivan, Martin J. - President and CEO
BEFORE I TOOK OFFICE IN -- I SET OUT WITH
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| 02:17:00 |
Shays, Christopher - U.S. Representative, [R] Connecticut
AIG'S BOARD TO PUT IN ADDITIONAL RESOURCES NOT ONLY IN THE WRIST AREA, BUT IN THE LEGAL COMPLIANCE AREAS. -- THE RISK AREA. >>
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| 02:17:15 |
Sullivan, Martin J. - President and CEO
THERE ARE FOUR PARAGRAPHS, BUT HE SAID TO THE ISSUE OF WHAT HAPPENED TO AIG, THE HISTORY HAS BEEN WELL-RECORDED IN THE PRESS. AIG FINANCIAL UNIT SOLD...
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| 02:17:37 |
Shays, Christopher - U.S. Representative, [R] Connecticut
IN CREDIT DEFAULT SWAP AND OTHER FINANCIAL PRODUCTS. AIG WAS FORCED TO MARK TO MARKET AND SO ON. THE SWAPS WERE BASICALLY, HOW DID THEY RELATE TO THE...
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| 02:18:29 |
Sullivan, Martin J. - President and CEO
US SWAP ON LOTS OF BONDS THAT SAID THE LOW YOU. THEY CAN BE
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| 02:18:34 |
Shays, Christopher - U.S. Representative, [R] Connecticut
IN AN
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| 02:18:38 |
Sullivan, Martin J. - President and CEO
EQUITY OR TRIPLE
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| 02:18:41 |
Shays, Christopher - U.S. Representative, [R] Connecticut
B, THEY SAT OVER AND ABOVE THE AAA AN ADDITIONAL PROTECTION.
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| 02:18:46 |
Sullivan, Martin J. - President and CEO
I HAVE BEEN TRYING TO DIFFERENTIATE BETWEEN THE UNINTENDED CONSEQUENCES WHEN YOU TAKE MARK TO MARKET IN A LIQUID MARKET. >> WE WILL DEAL WITH THIS IN...
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| 02:19:22 |
Shays, Christopher - U.S. Representative, [R] Connecticut
TO THE MARKETPLACE, BUT CLEARLY WE WILL BE LOOKING AT THAT. WHAT I WANT TO ESTABLISH ON THE RECORD IS THAT YOU WERE INVOLVED IN THE SEVEN PRIME MARKET,...
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| 02:20:08 |
Sullivan, Martin J. - President and CEO
OTHER'S BACK. .. >>
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| 02:20:18 |
Shays, Christopher - U.S. Representative, [R] Connecticut
AS I MENTIONED EARLIER, THERE WAS A BASE SALARY -- >> NO, I WANT TO KNOW WHO APPOINTS THE COMPENSATION COMMITTEE. FIVE EMPLOYEES OF THE COMPANY? >>...
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| 02:21:01 |
Sullivan, Martin J. - President and CEO
HOW ARE THEY APPOINTED? >> FROM WHAT I RECALL,
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| 02:21:06 |
Shays, Christopher - U.S. Representative, [R] Connecticut
THE RECOMMENDATION OF THE COMMITTEE MEMBERSHIP IS MADE BY THE GOVERNANCE COMMITTEE BY THE BOARD AT
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| 02:21:13 |
Sullivan, Martin J. - President and CEO
LARGE. >> THAT IS CORRECT. >> MY SENSE IS THAT IT IS A CLUB
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| 02:21:18 |
Shays, Christopher - U.S. Representative, [R] Connecticut
AND THE CLUB, BASICALLY, REWARD
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| 02:21:20 |
Sullivan, Martin J. - President and CEO
THEIR FRIENDS. >> WE
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| 02:21:22 |
Shays, Christopher - U.S. Representative, [R] Connecticut
HAVE HELD A COUPLE OF HEARINGS IN THIS COMMITTEE ABOUT
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| 02:21:26 |
Sullivan, Martin J. - President and CEO
THIS COMPENSATION -- OF THESE COMPENSATION COMMITTEES THAT ARE SELECTED BY THE BOARDS AND OFTENTIMES,
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| 02:21:35 |
Unidentified Speaker, -
THE PEOPLE THAT ARE SELECTED ARE DOING
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| 02:21:37 |
Shays, Christopher - U.S. Representative, [R] Connecticut
OTHER CONSULTING WORK FOR THE CORPORATION THAT IS MUCH MORE PROFITABLE FOR THEM. OF COURSE, YOU SEE THAT
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| 02:21:44 |
Waxman, Henry - U.S. Representative, [D] California
FROM THE MANAGEMENT OF THE CORPORATION. FROM THERE, THEY DECIDE WHAT THE COMPETITION WILL BE FOR THE MANAGEMENT OF THE CORPORATION WITH CLEAR UNDERSTANDING...
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| 02:22:20 |
Shays, Christopher - U.S. Representative, [R] Connecticut
YOUR CONSTITUENTS HAVE HAD THE SAME
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| 02:22:22 |
Waxman, Henry - U.S. Representative, [D] California
EXPERIENCE WE ALWAYS SAVE MORE THAN WE
|
| 02:22:25 |
Shays, Christopher - U.S. Representative, [R] Connecticut
LEARNED, UNLIKE THE COUNTRY AND MOST CITIZENS. WE'RE COMPLETELY DEBT-FREE. WE HAVE INVESTED VERY SIGNIFICANT AMOUNT AND WHAT THE SO-CALLED RE-RATING...
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| 02:23:44 |
Waxman, Henry - U.S. Representative, [D] California
A HEARING BY THE HOUSE OVERSIGHT AND GOVERNMENT REFORM COMMITTEE CROPPING UP. A BIT OF A SHORT PROTEST THERE IN THE BACK OF THE HEARING ROOM IN THE RAYBURN...
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| 02:25:02 |
Unidentified Speaker, -
ON THE RETREAT ON A POSH RESORT A WEEK AFTER THE GOVERNMENT BAILOUT OF THE INSURER. THIS ACCORDING TO THEHILL.COM. THE LAWMAKER ADDED, THEIR EXECUTIVES...
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NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.