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Bachus, Blunt: Americans Deserve Answers Regarding AIG's Bailout To Protect Taxpayers In The Future

WASHINGTON, November 19, 2009 -

- Congressman Spencer Bachus, the top Republican on the Financial Services Committee, and Former House Majority Leader Roy Blunt (R-MO), the second ranking Republican on the House Energy and Commerce Committee, today called on Chairman Barney Frank to schedule a hearing to examine the November 17th report by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) regarding AIG's counterparty payments.

Bachus and Blunt stated, "As you know, the report paints a devastating picture of government regulators ill-prepared to deal with the failure of complex financial institutions like AIG, and who failed to fight for what was in the best interest of the taxpayers."

"Before Members of Congress are asked to vote on legislation that seeks to codify future AIG-style bailouts, the Financial Services Committee needs to hear from Treasury Secretary Timothy Geithner - who headed the Federal Reserve Bank of New York during the AIG bailout - and other officials who can answer questions about this backdoor bailout of foreign and domestic counterparties so that Congress can effectively craft legislation to ensure that taxpayers will be protected in the future," Bachus and Blunt wrote.

"The SIGTARP report provides further evidence that government bureaucrats should not have the ability to sign off on choosing winners and losers in the marketplace.  Inevitably, the loser in that scenario will always be the American taxpayer.  Without a hearing to fully explore the decisions that led to the bailout of AIG and its counterparties, we are concerned that efforts to extend and expand TARP, as well as legislation currently being considered by the Financial Services Committee to codify a permanent bailout authority, will only lead to many of the same mistakes that have cost taxpayers hundreds of billions of dollars.  The American people deserve better," Bachus and Blunt stated in the letter.

Specifically, Bachus and Blunt want answers to several questions regarding AIG's bailout before the House considers legislation that seeks to codify AIG-style bailouts.  These questions include: whether the financial health of AIG's counterparties was a factor in paying them 100 cents on the dollar, the rationale for keeping the list of counterparties secret, and the impact of paying counterparties at par value if Congress enacts legislation to create a $200 billion bailout fund.

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