CREW: Department of The Treasury: Regarding AIG Bonuses: 7/15/10 - 2009-03-124 - Binder 4

"One thing is clear: Complaints that it was impractical, impossible or a waste of time to require banks to detail how they
used TARP funds wereunfounded,1I Barofsky said.

tiThe survey strongly supports my earlier recommendation to Treasury," he emphasized. 11 Banks can and should be
required to report on their use of taxpayer money to provide maximum transparency and not simply be asked to report
on the possible impact of the funds, such as giving only lending activity.u
rassley Says Program Must Increase Transparency

Ranking committee member Sen. Chuck Grassley, R-Iowa said the administration must start living up to its promise to
increase the program's transparency..
ttUnfortunately, despite saying all the right things about open government, the new administration has not made any
major changes aimed at making TARP more transparent,n he said.. uMoreover, I have heard about potential problems
with access to information from all three of the oversight bodies testifying. 1t .
Barofsky also told the committee about concerns his office now has to monitor nearly $3 trillion, which "is just short of
what the entire federal government spent in fiscal year 2008. Committee Chairman Max Baucus, D-Mont., noted, Ultls
like having a second United States government budget dedicated solely to saving the financial system, and that is truly
surreal. u
And Baucus cautioned tha~ this number could skyrocket to $7 trillion when other measures are added, such as $3 trillion
in Federal Reserve programs, Treasury's $400 billion support for Fannie Mae and Freddie Mac, and the administrationts
budget request fora placeholder worth up to $750 billion.
nlf all these additional amounts materializel taxpayers could be on the hook for a total of more than $7 trillion, H Baucus
said. lfThis is a huge, unprecedente~ financial commitment" It strains the comprehension of taxpayers and policymakers
alike,,"
Barofsky and Warren weren't the only watchdogs to express concerns today. Gene Dodaro of the Government
Accountability Office warned that Treasury would be hard-pressed to get additional funds approved by Congress unless
it improves its communication strategy.
uTreasury continues to struggle with developing an effective overall communication strategy that is integrated into TA,RP
t
operations/ said a new GAO report released today. ttWithout such a strategYI Treasury may face challenges should it
need additional funding for the program."
Barofsky said the TARP likely has $109 billion left in it , not $135 billion as stated by Secretary Tim Geithner Sunday on
ABets "This Week/' but the difference, he said,stems from Treasury calculatIng an anticipated fetor Ii of about $25 billion
from banks paying back TARP money as they get out of the program.
The GAO Says Treasury Has $109 Billion Left to Dole Out
The GAO report also said Treasury had about $109 billion left to allocate. Dodaro said Treasury has announced funding
for TARP at $667.. 4 billion, but expects to spend only about $590 billion of that. So far" they have ~Iready spent $303
billion.
Barofsky also announced today that next week his office, after receiving a le~ter from 27 members of Congress, would
announce an audit into AIG's TARP money that's going to counterparties. ·Also next week, Warren's Congressional
Oversight Panel win release its fifth oversight report on TARP.
After today's hearing on Capitol Hill, that report win not likely be rosy.
Copyright © 2009 ABC News Internet Ventures
TOOI3?1
Aiken, Justin (Contractor)
From: . Abdelrazek, Rawan
Sent: Tuesday, March 31,20094:42 PM
To: Cutter, Stephanie; Patterson, Mark (DO); Williams, Andrew; Baker, Isaac; Engebretsen.
Je"nni; Kashkari, Neel; Greene, Michelle"
SUbject: Re: ABC News: Treasury Under Fire for Handling of TARP
From: CUtter, Stephanie

To: Patterson, Mark (DO); Williams, Andrew; Baker, Isaac; Engebretsen, Jenni; Kashkari, Neel; Abdelrazek, Rawan;
Greene, Michelle
Sent: Tue Mar 31 16:40:09 2009
SUbject: Fw: ABC News: Treasury Under Fire for Handling of TARP
From: Gudmundson, Erika

To: _DL_Communications
Sent: Tue Mar 31 16:32:28 2009
Subject: ABC News: Treasury Under Fire for Handling of TARP
http://abcnews.go.com!Politics!story?id=7220163&page=1
By Matthew Jaffe
March 31, 2009
Six months after the Troubled Asset Relief Program was signed into law, lawmakers and oversight officials, worried
about the trillions of taxpayer dollars at stake, said Tuesday that-the Treasury Department had not resolved problems
regarding the programts accountability and transparency, nor a communications strategy. .
One watchdog group said flatly that Treasury had not cooperated with oversight efforts up tothis point.
"Our concern right now is that we do not seem to be a priority for the Treasury Department,U Elizabeth Warren
chairwoman of the Congressional Oversight Panel told a Senate Finance Committee hearing today. tfWe have sent
letters. We have requested that there be someone named so that we can get technical information. And so far, we have
not-been "a first priority.1I .
liAs I see it, you really have two options here," Warren said. "Either you get Treasury to get some religion on this point ..-
and put their own standards in place, or Congress is forced to step in. We will do everything we can on your behalf, as
your congressional oversight panel, but what we can best do for you now is to identify and pinpoint that this is precisely
1I
where the problem starts.
Neil Barofsky, special inspector general for TARP, voiced similar concerns. He noted that his office had recently
conducted a survey of all 364 TARP recipients on their use of government funds, something his office had requested
Treasury dOl only for the department to decline to do it except for Citigroup and Bank of America.
nOne thing is clear: Complaints that it was impractical, impossible or a waste of time to require b()nks to detail how they
used TARP funds were unfounded," Barofsky said.
uThe survey strongly su'pports my earlier recommendation to Treasury/II he emphasized. ttBanks can and should be
required to report on their use of taxpayer money to provide maximum transparency and not simply be asked to report
on the possible impact of the funds, such as giving only lending activity."
T001372
rassley Says Program Must Increase Transparency
I
Ranking committee member Sen. Chuck Grassley, R.. lowa said the administration must start living up to its promise to
increase the program's transparency.
"Unfortunately.. despite saying all the right things ab.out open government, the new administration has not made any
major changes aimed at making TARP more transparent," he said. "Moreover, I have heard about potential problems
with access to information from all three of the oversight bodies testifying. tt
Barofsky also told the committee about concerns his office now has to monitor nearly $3 trillion, which "is just short of
what the entire federal government spent in fiscal year 2008. Committee Chairman Max Baucus, D-Mont., noted, nit's
like having a second United States government budget dedicated solely to saving the financial system, and that is truly
surreal."
And Baucus cautioned that this number could skyrocket to $7 trillion when other measures are added, such as $3 trillion
in Federal Reserve programs, Treasury's $400 bUlion support for Fannie Mae and Freddie Mac, and the administration's
budget request for a placeholder worth up to $750 billion.
"If all these additional amounts materialize, ta?Cpayers CQuld. be on the hook for a total of more than $7 trillion," Baucus
said. uThis is a huge, unprecedented financial commitment. It strains the comprehension of taxpayers and policymakers
alike:'
Barofsky and Warren weren't the only watchdogs to express concerns today. Gene Dodaro of the Government
Accountabil.ity Office warned that Treasury would be hard-pressed to get additional funds approved by Congress unless
it improves its communication strategy.
"Treasury continues to struggle with developing an effective overall communication strategy that is integrated into TARP
operations," said a new GAO report released today. nWithout such a strategy, Treasury may face challenges should it
need additional funding for the pr~gram.u .
Barofsky said the TARP likely, has $109 billion left in it , not $135 billion as stated by Secretary Tim Geithner Sunday on
ABets uThis Week," but the difference, he said, stems from Treasury calculating an anticipated return of about $25 billion
from banks paying back TARP money as they get out of the program.
The GAO Says Treasury Has $109 Billion Left to Dole Out
The GAO report also said Treasury had about $109 billion left to allocate. Dodaro said Treasury has announced funding
for TARP at $667.4 billion, but expects to spend only about $590 billion of that So Jar, they have already spent $303
billion.
Barofsky also announced today that next week his office, after receiving a letter from 27 members of Congress, wo.uld
announce an audit into AIG's TARP money that's going to counterparties.Also next week, Warren's Congressional
Oversight Panel will.release its fifth oversight report on TARP.
After today's hearing on Capitol Hill, that report will not likely be rosy.
Copyright © 2009 ABC News Internet Ventures
TOOl373
Mcnulty, Amy
From: Adams Marti
1
Sent: Monday, March 16 2009 12:43 PM

1
To: Robertson William; _DL_FYI; _DL_Communications

1
Subject: Updated: AP-Obama: AIG cannot justify ·outrage' of bonuses
http~llnews.yahoo.com/s/ap/~ee90316/ap on go Dr wh/aig outrage/print
AP: Obama will try to block executive bonuses at AIG By TOM RAUM, Associated Press Writer
2 mins ago
WASHINGTON - President Barack Obama declared Monday that insurance giant American
International Group is in financial straits ~ecause of "recklessness and greed" and said he
intends to stop it from paying out millions in executive bonuses.
"It's hard to understand how derivative traders at AIG warranted any bonuses, much·less $165
million in extra pay,n Obama said at the outset of an appearance to announce' help for small
businesses hurt by the deep recession.
"How do they justify this outrage to the taxpayers who are keeping the company afloat l
l
' the
president said.
Obama spoke out in the wake of reports that surfaced over the weekend saying that financially
strapped American International Group Inc. was paying substantial bonuses to executives.
Noting that AIG has "received substantial sums" of federal aid from the federal government~
Obama said he has asked Treasury Secretary Ti~othy Geithner Uto use that leverage and pursue
every legal avenue to block these bonuses and make the American taxpayers whole."
SaidOb.Clma: "All across the country, there at epeoplewhoworkhardHandmeetHtheir

H
responsibilities every day~ without the benefit of government bailouts or multimillion-dollar

bonuses. And all they ask is that everyone, from Main Street to Wall street to Washington,
,play by the same rules. It
rrThis isn1t just a matter of dollars and cents," he added . nIt's about our fundamental
values."
The $165 million was payable to executives by Sunday and was part of a larger total payout
reportedly valued at $450 million. The company has benefited from more than $170 billion in a
federal rescue.
AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year,
the largest corporate loss in history. The bulk of the payments at issue cover AIG Financial
Products, the unit of the.company that sold credit default swaps, the risky contracts that
caused massive losses for the insurer.
-----Original Message-----
From: Robertson, William
Sent: Monday, March 16, 2ee9 12:39 PM
To: _DL_FYI
SUbject: AP-Obama: AIG cannot justify 'outrage' of bonuses
Obama: AIG cannot justify •outrage , of bonuses By TOM RAUM Associated Press Writer
113 words
T001389
16 March 2009
11:31
Associated Press Newswires
English
(c) 2909. The Associated Press. All Rights Reserved.
WASHINGTON (AP) - PresIdent Barack Obama says his administration will "pursue every legal
avenue" to stop insurance giant American International Group from paying $165 million in
executive bonu~es.
Obama made the declaration at the 'outset of an appearance at the White House to announce new
steps to ease loans for small businesses hurt by the economic crisis.
Obama said he has .asked Treasury Secretary Timothy Geithner to use the leverage of government
assistance'to AIG to get the company to roll back the bonuses. He said the company cannot
justify tlthis outrage to the taxpayers" who are keeping it afloat.
Document APRS0eeS20090316e53g001jj
T001390
McCarthy, Mary (Contractor)
From: Kashkari, Neel
Sent: Friday~ January'16, 2009 11:32 AM
To: , Wotfteich, Paul
SUbject: Re: SIG letter on executive compensation for clearance
Thanks
From: Wolfteich, Paul

To: Kashkari, Neel
Cc: Abdelrazek, Rawan
Sent: Fri Jan 16 11:30:17 2009

Sent: Friday, January 16, 2009 11:24 AM
To: Wolfteich, Paul; Abdelrazek, Rawan; Walters, Kathleen; Hoyt, Robert; AIJ;>recht, Stephen
Subject: Re: SIG ·Ietter on executive compens~tion for clearance
.
""",~~~",
. • ~~A"P'W"

To: Kashkari, Neel; Abdetrazek, Rawan; Walters,. Kathleen; HoYt, Robert; Albrecht, Stephen
Sent: Fri Jan 16 10:50:40 2009 '

Sent: FridaYI January 16, 2009 10:38 AM i
To: Wolfteich, Paul; Abdelrazek, Rawan; Walters, Kathleen; Hoyt, Robert; Albrecht, Stephen
Subject: RE: SIG letter on executive compensation for clearance
(b) (5)
T001553
4.••• ~ •• :dl*I.·.nM':N~~wn"'",~"lC~~ty'.~_·· ~."~''''''~"''''''''''''''''''-~'''''JI'JPIr.''"'''''''_~'''C:;''~''I'''''''''' . _ .:.or....A ...~..~,.,...IIII~ ..........._·_:.:.""ftC'r""_
...._ ..~..~hcQ~IIC_"
" -_ _~ ~ I _ ""_~~Mh*,w=:rc~~

To: Kashkari, Neel; Abdelrazek, Rawan; Walters, Kathleen; Hoyt, Robert; Albrecht, Stephen

Sent:" Friday, January 161 20099:40 AM
To: AbdeJrazek, Rawan; Wolfteich, Paul; Walters, Kathleen; Hoyt, Robert; Albrecht, Stephen
From: Abdelrazek, Rawan

T001554
To: Kashkarl, Neel
SUbject: Fw: SIG letter on executive compensation for clearance
Sig letter for review

To: OFS - Executive secretary
Cc: Neubauer, Ellen; Walters, Kathleen; Abdelrazek, Rawan
Sent: Fri Jan 16 08:31:01 2009
Subject: SIG letter on executive compensation for clearance
Attached is a letter for Neel's signature to the SIG on executive compensation" The letter was cleared by Steve Albrecht,
Duane Morse, and Paul Wolfteich, and drafted by Kathleen Walters. The letter should go out today.
Thanks very much.
Paul
T001555
Sent: Friday, January 16, 200911:24AM
Subject: Re~ SIG letter on executive compensation for clearance

To: Kashkari, Neel; Abdelrazek, Rawan; Walters, Kathleen; Hoyt, Robert; Albrecht, Stephen
Sent: Fri Jan 16 10:50:40 2009

~~~~~S"""u"'b'-"ie~ct...........
: ~G Jette. 01' exectftive~penS8tion4ef~eafafl€e~~~~~·

To: Kashkari, Neel; Abdelrazek, Rawan; Waltersr Kathleen; Hoyt, Robert; Albrecht, Stephen
T001559
From: K~shkarif Nee1
To: Abdelrazek, Rawan; Wolfteich, Paul; Walters, Kathleen; Hoyt, Robert; Albrecht, Stephen

To: Kashkari, Neel
Subject: Fw: SIG letter on executive compensation for clearance

To: OFS - Executive Secretary
Cc: Neubauer, Ellen; Walters, Kathleen; Abdelrazek, Rawan
Sent: Fri Jan 16 08:31:01 2009
Attached is a tetter for Neel's signature to the SIG on executive compensation . The letter was cleared by Steve Albrecht,
Duane Morse, and Paul Wolfteich, and drafted by Kathleen Walters. The letter should go out today.
Thanks very much.
Paul
T001560
From: .Abdelrazek, Rawan
To: Kashkari, Neel
Subject: Fw: SIG letter on executive compensatIon for clearance

To: OFS - Executive secretary
Cc: Neubauer, Ellen; Walters, Kathleen; Abdekazek, Rawan
Sent: Fri Jan 16 08:31:01 2009
Attached is a letter for Neel's signature to the SIG on executive compensation. The letter was cleared by Steve Albrecht}
Duane Morse, and Paul Wolfteich, and drafted by Kathleen Walters. The letter should go out today..
Thanks very much.
Paul
T001566
From: Wolfteich Paul
t
Sent: Wednesday. March 18 20091:06 PM

t
To: Hsu, Michael

SUbject: RE: SIG question on AIG
(b) (5)
From: Hsu, Michael

Sent: Wednesday, March 18, 2009 1:04 PM
To: Wolfteich, Paul
Subject: Re: SIG question on AIG
(b) (5)

To: Hsu, Michael .
Sent: Wed Mar 18 13:03: 11 2009
~~=~FFI"-vo ...
m...-:. .I:isu,Mlcbae~I'~~~~~~~=~==~~=============~=======~
..
Sent: Wednesday,. March 18, 2009 8:43 AM
To: Wolfteich, Paul
Cc: Albrecht, Stephen
Subject: Re: SIG question on AIG

To: Hsu, Michael
Sent: Wed Mar 18 08:18:22 2009
Subject: SIG question on AIG
(b) (5)
From: Puvalowski, Kevin

Sent: Tuesday, March 17, 2009 7:43 PM
To: Wolfteich, Paul; Morse, Duane
Cc: saddler, Bryan; Barofsky, Neil
Subject: RE: AIG documents
T00157l
Sent: Wednesday. March 18t 2009 1:03 PM
To: Hsu, Michael
SUbject: RE: SIG question on AIG
i From: Hsu, Michael

Sent: Wednesday, March 18, 2009 8:43 AM
To: Wolfteich, Paul
Subject: 'Re: SIG question on AIG
----_ ...-......................
..........."'.........-..
~~=~T"o""'."""'H"""'· s......
u..,. . . Michael'-~-·~~=~====~==~=====~=======~======~~==~
Sent: Wed Mar 1808:18:22 2009
Subject: SIG question on AIG
(b) (5)

sent: Tuesday, March 17, 2009 7:43 PM
Cc: Saddler, Bryan; Barofsky, Neil
Subject: RE: AIG documents
Kev;n R. Puvalowski
Chief of Staff
Office of the Special Inspector General
For The Troubled Asset Relief Program
(202) 622-1584
TOOl573
kevin.puvalowski@.do.treas.gov
From: Wolfte1ch, Paul

Sent: Tuesday, March 17, 20098:25 AM
To: Saddler, Bryan; Barofsky, Neil
Cc: Puvalowskl, Kevin; Morse, Duane
Subject: AIG documents
Neill Bryan -, (b) (6 >-
Attached are several AIG documents relating to bonuses, including the-'Ietter mentIoned during our meeting
yesterday. Included here are documents that contain highly confidenti~rmation about individual compensation.
We request that you give this information appropriate confidential treatment"
Regards,
Paul
T001574
McCar~hY. Mary (Contractor)
From: Hsu, Michael
Sent: Wednesday, March 18. 20098:50 AM
To: Lambright. James
SUbject: Fw: SIG question on AIG
Forgot to include you...
From: Hsu, Michael

T~: Wolfteich, Paul
Sent: Wed Mar 1808:43:29 2009
Subject: .Re: SIG question on AIG
................... _.__ -------

....
From: Wotfteich, Paul
To: Hsu, Michael
Sent: Wed Mar 18 08:18:22 2009
Subje(:t; SIG question on AIG
Ih\ rr;\
\'-'/ \VJ

Cc: saddler, Bryan; Barofsky, Neil
SUbject: RE: AIG doc~ments
Paul,
(b) (5)
Thanks.
Kevin R. Puvalowski
Chief of Staff
Office of the Special Inspector General
For The Troubled Asset Relief Program
(202) 622-1584
kevin. puvalowski@do. treas. gov
T001575
Sent: Tuesday, March 17, 2009 8:25 AM
To: Saddler/.Bryan; Bar()fsky, Neil
Cc: Puvalowskl, Kevin; Morse, Duane
Subject: AIG documents
NeU,.Brya'n -
(b) (6)
Attached are several A1G documents relating to bonuses, Including th_letter mentioned dUring our meeting
yesterday.~ncluded here are documents that contain highly confidential information about individual compensation.
We request that you give this information appropriate confidential treatment. .
Regards,
Paul
T001576
From: Albrecht, Stephen
Sent: Thursday, January 29, 2009 6:00 PM
To: Wolfteich. Paul; Walters. Kathleen; Patterson, Dawn A; Schaffer, Laurie
Cc: Abdelrazek Rawan; Kashkari, Neel; Lambright, James; Tae Michael: Hsu Michael
l t t
Subject: RE: SIG sends new AIG section for his report

To:·Walters, Kathleen; Patterson, Dawn A; Schaffer, Laurie; Albrecht, Stephen
Cc: Abdelrazek, Rawan
Subject: SIG sends new AIG section for his report

To: Kashkari, Neel; Wolfteich, Paul
Subject: New AIG Section
(b) (5)
T001580
Sent: Wednesday, January 14, 20096:40 PM
To: Hsu, Michael
SUbject: RE: SIG update
From: Hsu, Michael

To: Wolfteichr Paul
Subject: RE: SIG update
Ok, will do.
From: Hsu, Michael

Sent: Wednesday, January 14, 2009 4:50 PM
To: Wolfteichl Paul
SUbject: SIG update
T001581
T001582
To: . Hsu Michael
t
SUbject: RE: SIG update
From: Hsu, Michael

Sent: Wednesday, January 14, 2009 4:50 PM
To: Wolfteich,' Paul
Subject: SIG update
T001583
·McCarthy, Mary l_C..on_t_ra_c_to_r.,. _
From: Cutter, ·Stephanie
Sent: Friday. January 30. 2009 5:30 PM
,To: Albrecht, Stephen; Kashkari, Neal
SUbJect: RE: so what's a networ~
There is no attachment
From: Albrechtr Stephen

Sent: Friday, January 30, 2009 4:56 PM
To: cutter, StephanIe; Kashkarl, Neel
Subject: ~E: so wha~s a network
Yes, Rawan sent it last night I've attached the email..
from: Cutter/ Stephanie

'Sent:Friday, January 30, i009 3:59 PM
I To: Albrecht, Stephen; Kas~kari, Neel
Subject: RE: so what·s a network
Did you send this chart?

To: Kashkari, Neel; Cutter, Stephanie
~~~~~Su""·br-.::~:-.,ct~: Re~whafsa-netw~===============~===============
We have a chart that Miller made with summaries of each dealt but its not for public consumption .. just internal reference.
. (tU send it along. . . (b) (5) .
If this is about AIG retention bonuses t
From: Kashkarl, Nee'

To: Cutter/ Stephanie
Cc: Albrecht, stephen
Sent: Thu Jan 29 19:32:03 2009
Subject: RE: so what's a network
Steve ... do we have this?
the exec ~mp requirements are different for healthy institutions and for systemic but falling institutions.
For healthy Cpp banks. it limits golden parachutes, etc for the top 5 execs.
For failing, it tias th~ sa~e limlt$ pius limits the bonus pool for a. much larger share of execs.
(b) (5)
T001622
(b) (5)
"\
•_• _Clc~_"A_".......
' _1_ _.......11......._~L_1.......
1 _ I~ - _ . ~ ~ . . . . . . . . . . . , .~
...... ~ .. 1 _ _~"'-'.~1_1~
1_1if_"""'~""'~tt'lIM~'l"oo4oot • . wIo4'o4-'~'F ,. I"IUIII; U".IMD~
From: Cutter, Stephanie

To: Kashkarl, Nee)
SUbject: FW: so what's a network
Do you hav~ a q~ick cheat sheet of what exec comp conditions are currently required?
.
.. ~"......"~" ...-..-..,...~, ....NI• ."..,.~~ ..wt,,,.,................"".....
......._ ........_ _..~......._.,..,..,.......w •• ,,,.....,,,..Wl,4o~~,. ......f .................... ~.MboMM...~~.f.,'".~,........,·
'~~ .... ... ~W" .......
\ ....
w......." ............wtI ... l........."•.:•.......,..a"*,'1&~"""""'.(\"''' ~_r_'-J''~'''41'"""",,,....., .. pty#'''.MI\
from: Todd, Chuck 0 (NBC Universal) [mailto:Chuck.Todd@nbcuni.com]

sent: Thursday, January 29, 4009 6:17 PM
To: cutter, Stephanie
SUbject: RE: so what's a network
touche...
can you help me at all with potentialslegal remedies for these bonuses?
~~ ............. ~~~IM.\aIalII
..... " ...... , . . . . . . . .4'"I~~A.......... lIi.llld . _ 114"~~"""'~~~~_1:'._1"""_·_~~_
From: .Stephanle"Cutter@do.treas.gov [mallto:Stephanle.CUtter@do.treas"gov]
To: Todd, Chuck 0 (NBC Universal)
· Subject; RE: so what's a network
Hir~ me some workers?
From: Toddt Chuck 0 (NBc Universal) [mallto:Chuck"Todd@rlbcunl.com]

To: CUtter, Stephan.ie
SubJeCt: so What's a neMork···
· correspondent got to do to get you to return call/email?
*****************.*********************************************
Chuck Todd
NBC News Political Dir.
w) 202...885-4542
C)!B
1) 202-362-2009
· ch'uc.tncuni·com
T001623
McCarthy! Ma!l' (_C_on_t_ra_c_to_r). - -_
'Sent: Friday. January 30, 2009 3:59 PM
To: Albrecht. Stephen; Kashkari r Neel
SUbJect: RE: 'so what1s a network
Did you send this chart?

Sent: Thursday, JanuarY 29, 2009 7:48 PM
To: Kashkarl, Neelj Cutter, stephanie
Subject: Re: ·so what's a network
We have a chart that Miller made with summaries of each deal. but Its not for public consumption - just Internal reference.
I'lt send i~ along. -
If this is about AIG retention bonuses

(b) (5)
From: .Kashkari, Neel j
To: Cutter, Stephanie

Sent: .Thu Jan 29 19:32:03 2009
. SUbject: RE: so whatts a network
Steve - do we have this?
The exec camp requirements are different fQr healthy institutions and for systemic but failing institutions. .
-For healthy CPP banks, it limits golden p~rachutes. efc for the top 5 execs.
For failing. it-has the same limit, plus limits the bonus pool for a much larger share of execs.. (b) (5)

Sent: ThurSday, January 29, 2009 6:45 PM
To: Kashkarl, Neel
Subject: FW: so what's a network
Do you have a quick cheat sheet of what exec comp conditions are currently required?
From: Todd, Chuck D (NBC Universal) [mailto:Chuck.Todd@nbcuni.com]

Sent: Thursday, January 29, 20096:17 PM
To: Cutter, Stephanie .
- . Subject: RE: so what's a network
)
touche...
T001624
can you help me at aU with potential legal remedies for these bonuses?
From: Stephanie.Cutter@do.treas.gov [mailto:Stephanie.Cutter@do.treas.gov]

Sent: ThursdaY,.January 29, 20096:17 PM
Subject: RE: so what's a network
Hire me some workers?

"_ "..'.......,..nrNAtuh' a..1'f.n""'."""..tIftr ~~ ~~". .II"• ...., " ~Mr.\._"......".,.¥M.NI.r""' 1IfI-t#'IIItNr ~~ ..- _ ..,. ~", _..,~ , ..,. ..,..,.."4I ".,..,,........ ' .. _M _.'.,._ ~a.~-"' -- "' ~ ,.4.".""'tiIlI '.t4'.,"I'~ H ..,..,~""f ..'Ill' h""hl
From: Todd, Chuck 0 (NBC Universal) [maUto:Chuck.Todd@nbcuni.com]

Sent: ThursdaYt January 29; 2009 6:16 PM
Subject: so what's a network
correspondent got to do to get you to return call/email?
***************************************************************
C)_
Chuck Todd
w) 202...885..4542
f) 202..362·2009
chJ,1.OCuni..coln
T001625
McCarthy, Mary (Contractor!
From: Kashkari, Neal
Sent: Thursday. January 29.20097:32 PM
To: Cutter. Stephanie
Cc: Albrech~ Stephen
SUbject: RE: so whatts a network
Steve - do we have this?
The exec comp requirements are different for healthy Institutions and for systemIc but failing institutions.
For healthy CPP banks, it IImlts.golden parachutes. etc for the top 5 execs~
For falling J It has the same limit ~luS limits the bonus pool for a much larger share of e.xecs. (b) (5)
- _ " -_ _. . ._ - ~ - - - - - - - " - - " " ' . _ - - _ - - · I
From: Cutter/·Stephanle
sent: Thursday, January 29, 2009 6:45 PM
To: Kashkarl, Neel
Subject: FW: so what'~ a network
Do you have a quick cheat sheet of what exec comp conditions are currently required?
Fr~m: Todd, ChuCk 0 (NBC Universal) [ma1Ito:Chuck.TaCld@nbcontcom]-

Sent: ThursdaYr January 29, 20096:17 PM
To: Cutter, Stephanle
Subjed:: RE: so whatfs a network
touche...
can you help me at aU with potential legal r~medies for these bonuses?
From: Stephanle~Cutter@do.treas.gov [mailto:Stephanie.Cutter@do_treas.gov]

Sent: ThursdaYt January 29, 2009 6:17 PM
SUbject: RE: so what's a network
Hire me some workers?

... ...,..t-r........-.""~~,...-~---.~'.,~ ..........''''''''''......4LIro...N'W¥'.............¥ ' t ' ' -..
.
,..,.~ ...-...-................-,.-.....~......................,..... '''~."",......~~
. ...
..."'.,••_«.....-.a..,~.iI*"M&A 'lU...~......~." ..... I.........._ ...~~ ......... t.........--... v ....'YfA('..aJ" .........,..... .,......,~'........,.~I....." ... .,.~yllio-'""'~-.'.,.,..,.-..,""'t.,.".,,'.....,.......
From: Todd, Chuck D (NBC Universal) [mailto:Chuck.Todd@nbcuntcom]

To: Cutter, StephanIe
Subject: so what's a network
corJespondent got to do to get you to return call/email?
T001628
***************************************************************
Chuck Todd
w) 202-885-4542
C)I!B
f) 202-362-2009
chuc.torLuni.com
T001629
McCarthy. Mary (C9ntractor) _
From: MichaeI.Alix@ny.frb.org
Sent: Thursday, March 19,2009 8:35 PM
To: Sarah.Dahlgren@ny.frb.org; Hsu Michael
J
Cc: James.Hennessy@ny.frb.org; Steven.Manzari@ny.frb. org

Subject: Re: Statement by New York State Attorney General Cuomo ... AIGFP Employee Retention
Plan
(b) (5)
From: Sarah Dahlgren

Sent: 03/19/2009 07:59 PM EDT
To: Michael Alix; uMichael Hsut' <MichaeLHsu@do.treas.gov>
Cc: James Hennessy; Steven Manzari
Subject: Fw: Statement by New York State Attomey General Cuomo - AIGFP Employee Retention Plan
ar Da gren
Senior Vice President
Federal Reserve Bank of New York
Office: 212..720-7537
Cell: (b) (6)
Sent from my BlackBerry Handheld.
F r o m : _ " _@AIG.com]
Sent: O~:56 PM AST .
To: fI'Ste hen F.. Bollenbach I
T001661
@aig.com>; I •
YNew York State Attorney
(b) (4)
II
ATTORNEY GENERAL CUOMO ANNOUNCES SIGNIFICANT DEVELOPMENT RELATED TO
AIG
I have received the list of AIG FP employees who received retention payouts. Mr. Liddy testified in
Congress yesterday that he intended to comply with our subpoena and ex.pressed concern for
employee safety. Mr. Liddy has in fact now complied with ~he subpoena. We are aware of the
security concerns of AIG employees, and we will be sensitive to those issues by doing a risk
assessment before .releasing any individual's name. The Attorney General's Office is a law
enforcement a.gency and is experienced in making t~ese assessments.
As we perform our review, we will simultaneously be working with AIG 'over the next few days to
determine which employees received payments and which choseto return the moneythey rec~ived.
The Attorney GeneralIs Office will responsibly balance tne public's right to know how their tax dollars
,~~a~r~e~'spe~twith individual security, privacy right~! and_ c()rporate p~erogat~ve.
At this moment, with emotions running high, it is important that we proceed diligently, with care,
reflection, and sober judgment.
We thank AIG for their compliance
Vice President - Corporate Governance and

Special Counsel and Secretary
to the Board of Directors
American International Group. Inc.
This a-mail, and any attachments thereto t is intended only for use by the addressee(s) named herein and may contain legaJly privifeged and/or
confidential information. If you are not the intended recipient of this e-maU. you are hereby notified that any dissemination distribution or copying of this
I
e-mail. and any attachments thereto. is strictly prohibited. If you have received this e-mail in error, please immediately notify me at (212) 770..6918 and
permanently delete the original and any copy of any a-mail and any printout thereof.
T001662
Sent: Wednesday, January 21 , 20091:19 PM
To: Kashkari, Neel
Subject: FW: The Compensation Disclosure 810g Update: Treasury Augments TARP Executive Pay
Rules F
Neel,
FYI. The news of our exec comp regs is distributed through blogs. (b) (5)
, Thanks.
-- Paul
--"'--Original Message-----
From: Jaconi ,Kristen
Jl
Sent: Wednesday", January 21, 2009 1:16 PM

To: Walters, Kathleen
Cc: Wolfteich l Paul; Patterson, Dawn,
Subject: FW: The Compensation Disclosure Blog Update: Treasury Augments TARP Executive Pay
Rules
From: Morriso~Jl Helen
Sent: FridaYJI January 16.11 2009 8:02 PM
T~: Jaconi, Kristen .
,Subject: FW: The Compensation Disclosure Blog Update: Treasury Augments TARP Executive Pay
Rules
Another. This Blog is distributed widely.
202-622-1357 (work)
(b) (6) (cell)
From: mborges@compensia.com [mailto~mborges@compensia.com]
Sent: Friday, January 16, 2009 7:57 PM
Subject: The Compensation Disclosure Slog update: Treasury Augments TARP Executive Pay Rules
The Compensation Disclosure Blog update: Treasury Augments TARP Executive Pay Rules
January 16.11 2009
http://www.compensationstandards.com/member/blogs/CompensationDisclosure/archive/001637.html
T001707
Treasury Augments TARP E~ecutive Pay Rules
This afternoon, the Treasury Department <a

href~Hhttp://www.treas.gov/press/releases/hp1364.htm">announced</a> a
series of changes and clarifications to the executive compensation
standards'under.the Troubled Asset Relief Programfs ("TARptl) Capital
Purchase Program ("CPPh). These are reflected in three documents:
- A revised <a
href=lIhttp://www.treas.gov/press/releases/reports/tarp%20_executive%2ec
ompensation%20ifr%20jan%~02009.pdf">Interim·Final Rule</a> for the CPP
executive compensation standards;
- A revised <a
href=··http://www.treas.gov/press/releases/reports/exec%20comp%29pssfi%2
0notice%20revised.pdf >Notice 200S-PSSFI</a>; and
ll
- Executive Compensation <a

href=uhttp://www.treas.gov/press/releases/reports/tarp%20_executive%20c
ompensation%20faqs.pdf~>FrequentlyAsked Questions</a> ("FAQs").
(u>New Requirement to Ensure Compliance

\
>From what I can tell, the primary purpose of the update was to respond
to criticism that the Treasury Department had nothing in place to
monitor compliance with the executive compens~tion standards. As
revised~ the chief executive officer of a participating financial
institution must certify annually (within 135 days after the
~~~~~i~~t~t~i~~~~4sca~year-end~that the institution and its board
compensation committee have complied with the standards.
In addition, within 120 days of receiving financial assistance, the CEO

must certify that the.compensation committee has reviewed the senior
executives' incentive compensation arrangements with the sen10rrisk
officers,to ensure that these arrangements do not encourage senior
executives to take unnecessary and excessive risks that could threaten
the value of the financial institution. (This is in addition to the
certification that the compensation committee its~~f must provide about
this review. For more on this~ see below.)
The CEO must send these certifications to the Chief Compliance Officer
of the TARP program~ and also must keep records to substantiate the
certifications.for at least six years following each certification.
Location of Compensation Committee Certification Changed
As you know, the TARP rules originally required the board ~ompensation
committee of public reporting financial institutions to include the
certification about its risk assessment in the institutions
Compensation Discussion and Analysis. As revised~ the Interim Final
Rule now provides that the certification be included in the
compensation Committee Repor~ 'required by Item 407(e) of Regulation S-K
(see revised Section 30.6(b) of the Interim Final Rule). This makes
much"more sense~ as the CD&A is a company, rather than a committee,
T001708
report.
other -Interesting Items

live skimmed the revised Interim Final Rule and the FAQs, and here are
a couple other interesting items:
- Compensation Recovery: The Interim Final Rule provides that

any compensation paid during the period that the Treasury Department
holds an equity or debt position acquired under the CPP is subject to
recoupment by the financial institution if the payments were based on
materially' inaccurate financial statements or any other materially
inaccurate performance metric criteria. The revised rule clarifies
·that, for this purpose~ compensation is considered "paid" when a senior·
executive officer "obtains a legally binding right to that payment
during the Treasury holding period." This ensures that a financial
institution will not be able to circumvent the standard by postponing
payments until after the Treasury Department is no longer an investor
in the institution.
- IdentifyingSenior Executive Officers: In the case of the

non-tax-related executive compensation standards (all of the standards
other than the section 162(m)(S) $50e~000 deduction limit), a financial
institution' s senior executi ve officers for a year 'are the 'tnamed
executive officers" who are identified in its annual report on Form
10-K or proxy stat.ement for that year(reporting the NEOs compensation
1
for the immediately preceding year). These individuals are to be

considered the senior executive officers throughout that entire year.
(see FAQ No. 2(a) - my numbering. For some reason, the FAQs aren1t
numbered.)
Bef~t~Q~~s:t-~tt!t-iQ~iden±ifies_j.t~£_J~tE.os~f~o~r~_~t~h~e~.~y~ea~r~,~i~t~m~u~st~m:::::a~k=e~~~~=~~=~~~~~
its best efforts to identify the year's senior executive officers for
purposes of the ·standard. While this should be easy when it comes to
the CEO and CFO, it may be trickier for the oth~r NEOs.
Interestingly~ the FAQ goes on to provide that if any executive is a

potential senior executive officer and he or she terminates employment
involuntarily (as that term is defined in the Interim Final Rule) prior
to the identification of the year's NEOs, the institution should
refrain from making any ~golden parachute payment" until t~e NEOs h~ve
. been identified. .
In the case of the Section 162(m)(5) $500,000 deduction limit, a

financial institution's senior executive officers are to be determined
based on the IInamed executive officers" who are identified ioits
annual report on Form10-K or proxy statement fO'r the year after
the year in which the tax deduction limitation applies. This is
because the limit on the amount of the tax deduction is based on
current year compensation. Consequently~ the senior executive officers
are to be determined based on their compensation for that year, rather
than compensation paid in the preceding' year.
- Golden Parachute Limitation: Similar to the compensation

recovery interpretation described above, payments made to senior
executives officers on account of an involuntary termination of
employment that are ~ad~ after the period that the Treasury
T001709
Department holds an equity or debt position under the CPP is considered
part of the ·payments.subject to the limitation on "golden parachutes"
if the termination of employment occurs during the period that the
Treasury Department is an inve~tor -in'the institution.
More FAQS on the way?
The FAQs are set up for additional questions and answers as time
passes. Something tells me that will probably see a few update~ this.
year.
Powered 'by Movable Type

Version 2.64
http://www.movabletype.orgt
T001710
McCarthr, Mary !Contractor)
Sent: Saturday, March 21.20092:04 PM
To: Bettinger, Lori; Walters, Kathleen; Hsu, Michael; Miller, David N; Kashkari. Neel; Greene,
Michelle; yViUiams, Andrew; Rosello, Christopher; Abdelrazek, Rewan: Fleetwood, Nancy;
Lambright, James; Maln, Jennifer; Morse, Duane; Schaffner, Ted; Schweitzer, Howard;
Tosini, Suzanne; Wolfteich, Paul
Subject: The Problem With Flogging A.I.G.
March 21, 2009

~rAI. !I{ING BUSINI!:SS
The Problem \Vith Flogging A.I.G.

By JOE NOCERA
Can we all just calm down a little?
Yes, the $165 million in bonuses handed out to executives in the financial products
division of American International Group was infuriating. Truly, it was. As many others
have noted, this is the same unit whose shenanigans came perilously close to bringing the
world's financial system to its knees. When the Federal Reserve chairman, Ben Bernanke,
said recently that A.I.G.'s "irresponsible bets" had made him "more angry" than anything
else about the financial crisis, he could have been speaking for most Americans.
But death threats? "All the 'executives and their families should be executed with piano
wire - my greatest hope," wrote one person In an e-mail message to the company.
Another suggested publishing a list of the ''Yankee·'' bankers "so some good old southern
boys can'take care of them."
. .
Or how about those efforts to publicize names of individual executives who received
bonuses - efforts championed by Attorney General Andrew CUOlffiO of New York and
.Barney Frank, chairman of the House Financial Services Committee. To what end?
How does outing these executives fix skewed compensation incentives, which have created
that unjustified sense of entitlement that pervades Wall Street~ No, it's mostly about using
subpoena power to satisfy the public's thirst for blood. (In light of the death threats, when
Mr. Cuomo' received the list of A.I.G. bonus recipients on Thursday, he promised to
consider "individual security" and "privacy rights" in deciding whether to publicize the
names.)
Then there was that awful Congressional hearing on Wednesday, in which A.I.G~'s newly
installed chief executive, Edward Liddy, was forced to listen to one outraged member of
Congress after another rail about bonuses - and obsess about when Treasury Secretary
T001712
Timothy Geithner learned about them - while ignoring f&r more troubling problems
surrounding the A.I.G. ,rescue.
Oh, and let's not forget the bill that was passed on Thursday by the House of
Representatives. It would tax at a 90 percent rate bonus payments made to anyone who
earned over $250,000 at any financial institution receiving significant bailout funds.
Should it become law, it will affect tens of thousands of employees who had absolutely
nothing to do with creating the crisis, and who are trying to help fix their companies.
Meanwhile, the real culprits -like Joseph J. Cassano, the former head of A.I.G.'s financial
products d~vision- are counting their money in "retirement." Nobody on Capitol Hill
seems much interested'in getting that money back. (And the bill does nothing about
bonuses that were paid pefore 2009, meaning that most of those egregious Merrill Lynch
bonuses, paid at the end of last year, will not be touched.)
By week's end, I was more depressed about the financial crisis than I've been since last
September. Back then, the issue was the disintegration of the financial system, as the
Lehman bankruptcy set off a terrible chain reaction. Now I'm worried that·the political
response is making the crisis worse.'The Obama administration appears to have lost its
g,:-ip on Congress, while the Treasury Department always seems caught off guard by bad
news.
And Congress, with its howls of rage, 'itschaottc, episodic reaction to the crisis, and its
==~shaRleless~p-layin~teuba-crflwds,Js _ o11Lofcontrol. Thiswee~, the body politic ran _qff the
rails.
There 'are times when anger is cathartic. There are other times when anger makes a bad
situation worse. "We need to stop committing economic arson," Bert Ely, a banking
consultant, said to me this week. That is what Congress committed: economic arson.
How is the political reaction to the crisis making it worse? Let us count the ways..
IT IS DESTROYING VALUE During his testimony on Wednesday, Mr. Liddy pointed out
that much of the money the government turned over to AI.G. was a loan, not a gift. The
company's goal, he kept saying, was to pay that money back. ~ut how? Mr. Liddy's plan is
to sell off the healthy insurance units - Of, failing that, give them to the government to sell
when they can muster a good price.
In other words, it is in the taxpayers' best interest to position A.I.G. as a company with
many profitable units, worth potentially billions, and one bad unit that needs to be
unwound. VVhich, by the way, is the truth. But as Mr. Ely puts it, "the indiscriminate
pounding that A.I.G. is taking is destroying the value of the company." Potential buyers are
TOOl713
wary. Customers are going elsewhe~e. Employees are looking to leave. Treating all of A.I.G.
like Public Enemy NO.1 is a pretty dumb way for a majority shareholder to act when he
hopes to sell the company for top dollar.
IT IS, UNFORTUNATELY, BESIDE THE POINT Even on Wall Street this week, I didn't
hear anyone condoniJ;1g the A.I.G. bonuses. They should never have been granted, and Mr.
Liddy should have been tougher about renegotiating them. (A rich irony here is that any
-nonfinancial company in A.I.G.'s straits would be in bankruptcy, and contracts would have
to be renegotiated. The fact that the government is afraid to force A.I.G. into bankruptcy,
desp~te its crippled state, is the main reason Mr. Liddy felt he couldn't try to redo the
contracts.) .
But there is a much bigger issue that has barely been touched upon by Congress: the way
tens of billions of dollars of taxpayers' money has been funneled to A.I.G.'s counterParties
- at 100 cents on the doll~r. How can it possibly make sense that Goldman Sachs, Bank of
America, Citigroup and every other company that bought credit-default swaps from A.I.G.
should be made whole by the government? Why isn't it forcing them to take a haircut?
What's worse, some of those companies are foreign 'banks that used credit-default swaps
to exploit a regulatory loophole. Should the United States taxpayer really be responsible
for ensuring the safety of European banl<s that were taking advantage of European
regulations?
The person who has made this point most forcefully is Eliot Spitzer, of all people. In his
column for Slate.com, he· wrote: '~Why did Goldman have to get back 100 cents on the
dollar? Didn't we already give ~oldman. a $125 billion ~sh infusion, and aren't they sitting
, on more than $100 billion in cash?" Mr. Spitzer told me that while "there is a legitimate
sense of outrage o.ver the bonuses, the larger outrage should be the use of A.I.G. funding as
a second bailout for the large investment houses." Precisely.
IT IS DESTABILIZING How can you run a company.when the rules keep changing, when
you have to worry about being second-guessed by Congress? Who can do business under
those circumstances?
Take, for instance, that new securitization program the government is trying to get off the
ground, called the Term Asset-Backed Securities Loan Facility - or TALF. Although it is
backed by large government loans, it requires people in the marketplace - Wall Street
bankers! - to participate..
This progr~m could help revive the consumer credit market. But at this point, most Wall
Street bankers would rather· be attacked by wild dogs than take part. They fear that they'll
T001714
do something - make money perhaps? - that will arouse Congressional ire. Or that the
rules will change. "The constant flip-flopping is terrible," said Simon Johnson, a banking
expert who teaches at theM.I.T. Sloan School of Business.
A.I.G. offers another good example. Not all the employees who face the possibility of
having their bonuses taxed out from under them work for the evil financial products
division. Many of them work in insurance divisions. Very few of them pull down million-
dollar bonuses, and none of them brought A.I. G. to its knees. (And employees who bought
the company's stock are already hurting financially, having seen its value virtually wiped
out.) They are the ones the company badly needs to keep if it hopes to sell those units at a
healthy price. Taking away their bonuses - after they've already put the money in their
bank accounts - hardly seems like the right way to motivate them. And demonizing them
in Congressional hearings doesn't help either.
In previous columns, I have been an advocate of nationalizing big banks like Citigroup.
But after watching Congress this week, I'm having second thoughts. If thi~ is how Congress
treats A.I.G., what would it do If it had a bank in its paws?
What the country really needs right now from Congress is facts instead of rhetoric. Instead
of these "raise your hand if you took a private jet to get here" exercises of outraged
populism, we need hearings that.educate and illumil)ate. Hearings like the old Watergate
hearings. Hearings in which knowledge is accumulated over time, and a record is.
established. Hearings that might actually help us get out of this crisis. It's happened
~~~~b~e~ ~shedtheP~~namedfurfts~iclcouns~,
Ferdinand Pecora. It was an intense, two-year inquiry, and its findings - executives
shorting their own company's stock, for instance - shocked the country. It also led to the
, establishment of the Securities and Exchange Commission and other investor protections.
One person who has been calling for a new Pecora committee is Senator Richard Shelby of
Alabama, a Republican and key member of the Senate BankingCom-mittee.
"AS we restructure our regulatory system, we need to be thorough," he told me.."We need
to understand what caused it. We shouldn't rush it."
Meanwhile, the House Financial Services Committee has sched~led a hearing on Tuesday
.featuring Mr. Bernanke and Mr. Geithner. The hearing h.as been c.alled to find out only one
thing: what did the two·men know about the A.I.G. bonuses, and when did they know it?
Is that Nero I hear fiddling?
Rawan Abde/r8zek
Senior Advisor to the Assistant Secretary for Financial Stability and International Economics
U,S. Department ofthe Treasury
Phone: 202..622-0240
Email- rawan,abdelrazek@do,treas.gov
Room: 3015 MT
T001715
McCarthy, Mary (Contractor)_- _
From: Hsu, Michael

Sent: Wednesday, March 18,2009 10:23 PM
To: Lambright, James
Subject: Thoughts
T001718
McCarthy, Mary {.C_o_n_tr_ac_t_o_r). ... - - _
From: Baker. Isaac

Sent: Wednesday, March 18 20093:40 PM
1
To: Albrecht, Stephen

Subject: Tim signed off on this
Isaac Baker
Treasury Public Affairs
202-622-1374
T001719
McCarthy, Mary (Contractor>. - _
From: Chase, Beverly F~nger [beverly.chase@dpw.com] .

Sent: Monday, March 23, 2009 3:26 PM
To: Chase Beverly Fanger; Hsu, Michael
f
Subject: RE: Time for a call
Actually, as I have to get on a can with the AIG folks at 5~ let's shoot for 4 if that works.
To ensure compliance with requirements imposed by the IRS, we inform you that, unless explicitly provided
otherwise, any U.S. federal tax advice contained in this communication (including any attachments) is not
of
intended or written to be used, and cannot be used, for the purpose (i) avoiding penalties under the Internal
Revenue. Code or (ii) promoting, marketing or recommending to another party any transacti9D or matter
addressed herein.
. ****************~********
Beverly F. Chase '
Davis Polk & Wardwell
450 Lexington Avenue
New y ~rk, New York 10017
chase@dpw.com (email)
212-450-4383 (tel)
212-450-3383 (fax)
*************************
From: Chase, Beverly Fanger
Sent: Monday, March 23, 2009 3:25 PM
To: 'michaethsu@do.treas.gov'
Subject: Time for a call
What works ror you? I am on anctoffcalls, but-would-hupe to'be free aroutttf.4;30. Weulti-4~~f&~eftl:u?~. ===~
To ensure compliance with requirements imposed by the IRS, we inform you that, unless explicitly provided
otherwise, any U.S~ federal tax advice contained in this communication (including any attachments) is not
intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recomlnending to another party any trans'action or matter
addressed herein.
*************************
Beverly F. Chase
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
chase@dpw.com (email)
212-45-0-4383 (tel)
212-450-3383 (fax)
*************************
T001720
C_o_nt_ra_c_t_or..>
.McCarthy, Mary (.. - ..... _
From:
Sent:
To:
.
(b) (6)
y, ,
Lambright, James
@Nev,.tYork ~@l;llg.com]
28t200911~
Subject: Time for a quck call?
~idn't know if you were up to speed on latest work streams. Would also like to get some
insight on the package Treasury has introduced last week.
I am at my (b) (6) if you have a moment.
T001721
McCarthX;, Mary (Contractor)
From: Lambright. James
Sent: Wednesday, January 14. 20094:07 PM
To: Fiechter, Jonathan
Subject: RE: Time tomorrow to chat about AIG?
We could also invite Matt Rutherford, who is on detail from the Fed and knows about this company.
From: Fiechter, Jonathan

Sent: Wednesday, January 141 2009 3:58 PM
Cc: Kashkari, Neel; Abdelrazek, Rawan
Subject: FW: Time tomorrow to chat about AIG?
Jim"
. .
~...,;....-:"#;':'\'..~k~"""""'~""'-a"'"'~i.'\";"'~"':'''''-~P,-''''''''~_'=.#t''I_.v':'i.l''''::A:'\1'~..:
....t1'.,..N'............" ................"'...."..........~ ... ~;.;.~,: ... ;.~.,.,.w ...:a.c."."...Ilt"......."'..,...,.,.y_...........·.,.:.:,.:..t.::..~,'\":~~!'SY!"~~h'!'~~~ w.....~..·.u..;:i.~~~~i ••'~~~,.,.,,",,:,,,O-:--_.,_I~tI'-I ...,.;.,;M.l~...~.:.f.il.~=:..:.,·,,·:.¥~·:.1'I\:'S""":'~¥'(".....,~.··~,, ...,,~..,."""k'"~.::;L'":t(~1' ....=....,...~:-tot.,."" ....-.._..
From:"Sarah.Dahlgren@ny.frb.org (mailt9:5arah.Dahlgren@ny.frb.org] .
sent: Tuesday, January 13, 2009 9:04 PM
Subject: Time tomorrow to ~hat about AIG?
Thanks in advance -- I was thinking that if we touched base tomorrow, we could set up something for later this week to
provide a briefing for the riQht set of folks on your end.
Sarah
* * * * * * * * * * * * * *
Sarah Dahlgren
212-720..7537 (work) .
_ (blackberry)
T001722
visit W\fVW.. newyorkfed.org
* * * * * * * * * * * * * *
T001723
McCarthy, Mary (Contractor!_- ...... _
From: Lambright James 1
Sent: . Wednesday, January 14,20094:01 PM

Cc: Kashkari? Neal; Abdelrazek, Rawan
Subject: RE: Time tomorrow to chat about AIG?
Should probably be me. Didn't have anyone on the team when we did it, so it's Albrecht or me at this point.
From: Fiechter, Jonathan

Sent: Wednesday, January 14, 2009 3':58 PM
Cc: Kashkari, Nee1; Abdelrazek, Rawan
Subject:FW: Time tomorrow to chat about AIG?
-mo
.•• _
. _ ...,<#....""'''_...
. _.,IN#~ "~ ..yPol,,,._
.. - ..._._._
.
.
_ """-"~&"'"". . ~'.. ''''·A·I~.~.~qr._ •..,~~. .~..N'I.....................''.......<NI.yA'''''.,~·IA.,wlll....1""'V._.....-.r'..~...--......._......."W.,I.~.....".a.'''WI..,r..H:I#JIIHI,,_:_
. . . ~ _ _ Ith¥A..." ...·~,..":"'",..;..."'"~~&.,. .~"r.'l,.~uw"."w4..........._..,.",..._"_'lI._",,-_'~ ..W,,,.,A."oI'I:•..,
.-
""tI.. .,'.II'I.."..'....N
From: Sarah.Dahlgren@ny..frb..org [mailto:Sarah.Dahlgren@nyJrb.org]

Sent: Tuesday, January 13,·2009 9:04 PM \,
To: Fiechter, Jonathan '.
Subject: Time tomorrow to chat about AIG?
Thanks in advance .-- I was thinking that if we touched base tomorrow r we could set up something for later this week to
provide a briefing for the right set of folks on your and.
Sarah
* * * * * * * * * * * * * *
Sarah Dahlgren
212-720...7537 (work)
(b) (6) (blackberry)
visit www.newyorkfed.org
* * * * * * * * * * * * * *
T001724
McCarthy, Mary (Contractor) -_
From: Fiechter Jonathan

J
Sent: WednesdaYt January 14, 2009 3:58 PM

Cc: Kashkari 1 Neel; Abdelrazek, Rawan
Subject: FW: Time tomorrow to chat about AIG?
From: Sarah.Dahlgren@ny.frb.org [mailto:Sarah.Oahlgren@ny.frb.org]

Sent: Tuesday, January 13, 2009 9:04 PM
Subject: Time tomorrow to chat about AIG?
Thanks in advance - I was thinking that if we touched base tomorrow, we could set up something for later this week to
provide a briefing for the right set of folks on your end.
Sarah
* * * * * * * * * * * * * *
Sarah Dahlgren
212-.720-7537 (work)
(b) (6) (blackberry)
visit www.newyorkfed.org
* * * * * * * * * * * * * *
T001725
McCarthy, Mary <_C_o_"t_ra-c--t-o..
r) .... _
Sent: Saturday, March 281 2009 7:39 PM
To: Hsu, Michael; Jaconi, Kristen; Solomon, Ian
Cc: Fitzpayne, Alastair '
Subject: Re: Time?
sorry guys - I was driving and didn't see this. I'm on a lpm-3pm flight tomorrow . Can talk
any other time.
----- Original Message -----

From: Hsu, Michael
To: Jaconi, Kristen; Solomon, Ian; Albrecht, stephen
Cc: Fitzpayne~ Alastair
Sent: Sat Mar 28 15:52:18 2009
SUbject: Re: Time?
I've looped him in. He should be on the" 4:30.
----- Original Message -----

From: Jaconi, Kristen
To: Solomon, Ian; Albrecht, Stephen
Cc: Hsu, Michael; Fitzpayne, Alastair
Sent: Sat Mar 28 15:49:56 2009
,Subject: Re: Time?
I will try to be on the call at 4':30, but I am not sure if 1 will have cell coverage~ The
·~~-~~-~~_.:AR~9PR-~4i~g,~_t.he-.AIG~~o.cumetl~anc.L_.exe~omp ...",o~===========
j S Ron Fer] aiz
----- Original Message

From: Solomon, Ian
To: Albrecht, Stephen; Jaconi, Kristen
Cc: Hsu~ Michael; Fitzpayne J Alastair
Sent: Sat Mar 28 15:35:52 2009
Subject: Time?
Kristen and steve,

I think one or both of you are' necessary for any useful ~iscussion of the comp issues raised
by Mike's email earlier. I know you,'re both' out of town -- is there any good time that works
for a call?
T001726
From: Hsu, Michael
Sent: Saturday, March 28,2009 3:52 PM
To: Jaconi, Kristen; Solomon, Ian; Albrecht, Stephen
Cc: Fitzpayne Alastair
t
Subject: Re: Time? .
I've looped him in. He should be on the 4:30.
---~- Original Message

From: Jacon~~ Kristen
To: Solomon., Ian; Albre'cht, Stephen
Sent: Sat Mar 28 15:49:56 2909
Subject: Re: Time?
I will try to be on the call at 4:30, but I am not sure if I will have cell coverage. The
TARP attorney working on the. AIG deal documents and exec camp is Ron Ferlazz·o
11 '
----- Original Message

From: Solomon~ Ian .
To: Albrecht~ Stephen; Jaconi, Kristen
Sent: Sat Mar 28 15:35:52 2009
Subject: Time?
Kristen and Steve~

I think one or both of· you are necessary for any useful discussion of the comp issues raised
~~~~I~f4.ikels email ea.r~~~kJlOW~oJllre bo-±ILDuLof_tGWlL-- ~~~~ime thii:LWO£ks~~~~~
for a call?
T001727
From: Jaconi, Kristen
Sent: Saturday. March 28,20093:50 PM
To: Solomon, Ian; Albrecht, Stephen
Subject: Re: Time?
I will try to be on the call at 4:30, but I am not sure if'r will have cell coverage. The
TARP attorney working on the AIG deal documents and exec comp is Ron Ferlazzo.
----- Original ~essage

From: Solomon, Ian
To: Albrecht, Stephen; Jaconi~ Kristen
Cc: Hsu, Michael; Fitzpayne Alastair
J
Sent: Sat Mar 28 15:35:52 2009

SUbject: Time?
Kristen and steve,

I think one or both of you are necessary for any useful discussion of the camp issues raised
by Mike's email earlier. I -know you're both out of town -- is there any good time that works,
for a call?
T001728
From: Hsu, Michael
To:- Cutterj Stephanie; Lambright. James; Albrecht. Stephen; Williams. Andrew
SUbJect: timing
From: James.Hennessy@ny.frb.org [mailto:James.Hennessy@ny.frb.org]

Sent: Friday, February 27, 2009 10:13 AM
, To: Hsu, Michael; Albrecht, Stephen
Cc: Too, Michael; Ferlazzo, Ronald
Subject: Re: whafs your phone number?
(b) (5)
From: Michael.Hsu
Sent: 02127/2009 10:06 AM EST
To: Stephen.Albrecht@do.treas.gov; James Hennessy
Cc: MichaetTae@do.treas.gov; Ronald.Ferlazzo@do.treas.gov
Subject: RE: what's your phone number?
I spoke to him. we're set on that.
We need to circle up on exec camp at some point.

Sent: Friday, February 271 2009 10:06 AM
To: fJames.Hennessy@ny.frb.org'
Cc: Hsu, Michael
Subject: Re: what's your phone number?
T001734
I.m in the Hill at a briefing., Should be back in an hour. 202-622-1143.
From: James.Hennessy@ny.frb.org
Cc: Hsu, Michael
Sent: Fri Feb 27 09:56:53 2009
Subject: what's your phone number?
Need to speak about the new TARP capital infusion(s) and an option we have come up with for your consideration.
T001735
Robertson, Terri (Contractor)
From: James.Hennessy@ny.frb.org .
Sent: MondaY,March 30,200912:40 PM
To: Albrecht, ,StePhen; H, SU, ,Michael ,_ .
Subject: Fw: 3pmComp Committee Meeting (b)(6)
Attachments: ATT00001.gif
Fyi.
From: "Chase, Beverly Fanger" [beverly.chase@dpw.com]

.Sent: 03/30/2009 12:34 PM AST
To: "Stephen.Albrecht@do.treas.gov" <Stephen.Albrecht@do.treas.gov>; "'Michael.Hsu@do.treas.gov'"
.<Michael.Hsu@do.treas.gov>
Cc: Jame"s Hennessy; "Huebner, Marshall S." <marshall.huebner@dpw.com>; "James, Ethan T. n
<ethan,..jam,eS@,dPw.com>;"W,rig.ht,JOhnT,_,',' <j~,. t@dpw.com>
Subject: FW: 3pm Comp Committee Meetin~ (b)(6)
From: martha.cook@ey.com [mailto:martha.cook@ey.com]

sent: Monday, March 30, 2009 12:34 PM
To: Chase, Beverly Fanger
cc: 'James.Hennessy@ny.frb.org'; william.m~y.comi Nancy.Kellyl@ey.com
Subject: Re: 3pm COmp COmmittee Meetin~ (b)(6)
Yes. Beverly. I.agree.
Qualified plan amount retained by AIG is funded and would not represent an out of pocket expense to the Company.
Thanks.
Ernst & Young ®

Ernst & Young LLP
Martha H. Cook Principal • Perfonnance & Rewards Practice - HR Transactions I HR Risk I HR Tax Advisory
55 Ivan Allen Jr.Blvd. SUite 1000 Atlanta, Georgia 30308

Tel 1: +1.404.817.5734 Fax: +1.866.305.5660
EY/Comm: 28-64469
www.ey.com
Assistant: Marla Epnett Phone: +1.404.817.4654
Thank you for considering the environmental impact of printing emails.
"Chase, Beverly Fange," <beverly.chase@ldpw.com> To '"James.Hennessy@ny.frb.org'" <James.Hennessy@ny.frb.org>.

"'martha.cook@ey.com'" <martha.cook@ey.com>
T001810
cc
03/30/2009 12:19 PM Subjed Re: 3pm Comp Committee Meeting
All that remains behind is the qualified AIG plan so it is no$$$ from AIG's direct pocket as I understand it.
To ensure compliance with requirements imposed by theiRS. we inform you that. unless explicitly provided otherwise,
any U.S. federal tax advice contained· in thi's communication· (including any attachments) is not intended. or written to be
used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any transaction or matter addressed herein.
From: Chase, Beverly Fanger

To: 'James.Hennessy@ny.frb.org r i 'martha.cook@ey.com'
sent: Mon Mar 30 12:17:03 2009
Subject: Re: 3pm Comp Committee Meeting
R!! compliance with requirements imposed by the IRS. we inform you that, unless explicitly provided otherwise,
any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be
used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting,
To: Ch~se, Beverly Fanger; Martha Cook
Sent: Mon Mar 30 12:09:50 2009
Subject: Fw: 3pm Comp Committee Meeting
Can you please clarify. Thanks
From: James Hennessy

Sent: 03/30/2009 12:09 PM EDT
To: "Stephen Albrecht" <stepben.albrecht@do.treas.gov>; "Michael Hsu" <michael.hsu@do.treas.gov>
Cc: Sarah Dahlgren
Subject: Re: 3pm Camp Committee Meeting
(b) (5)
•
From: Stephen.Albrecht
Sent: 03/30/2009 12:02 PM AST
To: Michael.Hsu@do.treas.gov; James Hennessy
Cc: Sarah Dahlgren
Subject: RE: 3pm Comp Committee Meeting
(b) (5)
T001811
From: Hsu, Michael
sent: Monday, March 30, 2009 10:49 AM
To.: 'James.Hennessy@ny.frb.org'; Albrecht, Stephen
Cc: 'Sarah.Dahlgren@ny.frb.org'
Subject: Re: 3pm Camp Committee Meeting
Discussing now.
To: Albrecht, Stephen; Hsu, Michael
Cc: sarah.Oahlgren@ny.frb.org
sent: Mon Mar 30 09:49:58 2009
Subject: 3pm Comp Committee Meeting
Have you expressed to DPW your views on the agenda ~tems for this afternoon? They (or we) will need them prior to the
mee~ . .
-On' • t the good news seems to be that the vast majority of his retirement benefit is being funded by the
purchase •
Any U.S. tax advice contained In the body of this e-mail was not intended or written to be used. and cannot be
used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue
Code or applicable state or local tax law provisions.
The information contained in this message maybe privileged and confidential and protected from disclosure. If the reader of this message is not the
intended recipient, or an employee or agent responsible for delivering this message to the intended .recipient. you are hereby notified that any
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NY 10036. Thank you. Ernst & Young LLP
T001812
C_o_n_tr_8_ct_o_,..
Robertson, Terri (.. ) ...... _
From: Chase, Beverly Fanger [beverly.chase@dpw.com]
Sent: Monday, M.arch 30,2009 12:35 PM
To: Albrecht, Stephen; Hsu, Michael
Cc: James.Hennessy@.ny.fr.•·b.org; Hueb.~
ner Mars II S.; James. Ethan T.; Wright, John T.
Subject: .FW:·3pm Comp Committee Meetin~ (b)(6)
From: martha.cook@ey.com [maUto:martha.cook@ey.com]

sent: Monday, March 30, 2009 12:34 PM
To: Chase, Beverly Fanger
CC.: 'Ja.meS,H. ennessy@..ny.frb.Org'i William.mu.~com; Nancy.Kellyl@ey.com
SUbject: Re: 3pm Comp Committee Meettng_ (b)(6)
Yes, Beverly, I agree.
Qualified plan amount retained by AIG is funded and would not represent an out of pocket expense to the Company.
Thanks.
Ernst & Young ®

Ernst & Young LLP
MarthaH. Cook Principal Perfonnance & Rewards Practice .. HR Transactions I HR Risk 1 HR Tax Advisory
55 Ivan Allen Jr.Blvd. Suite 1000 Atlanta, Georg fa 30308

Tel 1: +1.404.817.5734 Fax: +1.866.305.5660
EY/Comm: 28-64469
www.ey.com
Assistant: Marla Epnett Phone: +1.404.817.4654
Thank you for considering the environmental impact of printing emails.
"Chase, Beverly Fang.'" <beverly.chase@dpw.com> To t1'James.Hennessy@ny.frb.orglll <James.Hennessy@ny.frb.org>,

t1'martha.cook@ey.com"' <martha.cook@ey.com>
03/301200912:19 PM cc
Subject Re: 3pm Camp Committee Meeting
All that remains behind is the qualified AIG plan so it is no $$$ from AIGls direct pocket as I understand it.
To ensure compliance with requirements imposed by the IRS, we inform you that. unless explicitly provided otherwise,
any U.S. federal tax advice contained in this communication (inclUding any attachments) is not intended or written to be
used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting.
T001813
United States Govemment Accountability Office
Testimony
GAO Before the Subcommittee on Capital
Markets, Insurance, and Government
Sponsored Enterprises, House Committee
on Financial Services
For Release on Delivery
Expected at 10:00 a.m. EDT
Wednesday, March 18, 2009
FEDERAL FINANCIAL
ASSISTANCE
Preliminary ObseIVations
on Assistance Provided to
AIG
Statement of Orlce M. Williams, Director
Financial Markets and Community Investment
!
6 GAO
~
Accountllbllity * Integrity * Reliability
GAO-09-490T
T002051
March 18.2009
FEDERAL FINANCIAL ASSISTANCE

Preliminary Observations on Assistance Provided to
AIG
~gll~~GAQ-~:4:~OT.·ate8tJmonyto
S~I11IYl~~9rlq~ .Markets.
Insu,.nce.irid.QoV.mrner.t$PrJri80red
Erat~ijJri.tl88~.··.22tr'~~~.·.~~.·.flflllI1CI8J
sElMce8·~o,!.trC)f .• R~I;).......tfves
WhY.··QAc)•• PitiThls·.·StLicIY What GAO Found

TheB03rdofGOVernors·of the Federal financial assistance to AlG, both from the Federal Reserve and
F~~q.1~rve~Irl·(Fedel1fJ Federal ReseIVe Bank of New York through their authority to lend funds to
ReSe(VeJaI!\d:tljePePartmel\tof critical nonbank institutions and from Treasury's Troubled Asset Relief
the·~~)·llave Program (TARP), has focused on preventing systemic risk that could result
fuaQeavaililble.over•.$l82·billion from a rating downgrade or failure of AlG. The goal of the assistance and
in aSsiStaltcetoArnerican subsequent restructurings·was to prevent systemic risk from the failure of AIG
.• Jntf!~ofl8.lGtQUP(!UG) •.00
•
p~m~.·.!f4; :.~~~.· ~()"\!eVer, • ·• by allowing AIG to sell assets and restnlcture its operations in an orderly
manner. The Federal Reserve has been monitoring AIG's operations since
qu~~M··.gaYt! •.••.~• ·.~.··.tlbout
the.·.goapJ••
·()f·t1l~· .• ~~ce •.and September, and Treasury has begun to more actively monitor A1G's operations
ho\V·itiS..,~mQ~t.Or~~.t\&J(), as well. Although the ongoing federal assistance has prevented further
bec~··.·~().·iS:.:··gm~·.··lcriown downgrades in AIG's credit rating, AIG has had mixed success in fulfilling its
•.
for··.i1:s·.·~ce· ·operati.ons. other restrncturing plans, such as tenninating its securities lending program.,
qUestiQ1lS.·~ • ~o~t .• ~e· •. effeet·of selling assets) and unwinding its AIG Financial Products portfolio. For
the·aSsiStaltce:()ncertafu example, AlG has made efforts at selling certain business units and has begun
inSurinlee tnark~t& an overall restructuring, but market and other conditions have prevented
significant asset sales, andmostrestnlcturing efforts are still under way. AlG
'1"'hjS ~Ir1~ntproVides faces ongoing challenges from the continued overaU economic deterioration
p~AA~on • ( l)·.the and tight credit markets. AIG~sabilityto repay its obligations to the federal
gQaI!Jal!\gm§mtQJ#tgoffedet:al govermnent has also been impaired by its deteriorating operations, inability to
.~¢f!·:.~.··~G • ·.aI!\d.•. cl@lellges
tP·~G'§Jj~~9ft1te
sell its assets and further declines in its assets.. All of these issues will
_~ce;aI!\(r(2)thep()tential continue to adversely impact AlG's ability to repay its govenunent assistance.
effectSofthe<fedela18ssiStance
onthErU.S.commercial As part of GAO's ongoing work related to the federal assistance provided to
propertY!~ty~ce AlG, GAO is reviewing the potential impact of the assistance on the
Inarket.GAO'sw():rk·orithese commercial property/casualty inSurance market. Specifically, GAO is
iSsu.~~o~9illg·±().·.d&te,·we reviewing potential effects of the assistance on AlG's pricing practices.
MvereV'iewedrelevant According to sorneof AIG~s competitors, federal assistance to AIG has
aocumentBoll.t1le8Ssistance. and allowed AIG's conunercial property/casualty inSurance companies to offer
ollg~illg9~(.)!'!Jgf{\IGJ . 8.S coverage at prices that are inadequate for the risk involved.. Conversely, state
w:eU··as.··<t~ent9iss~ed·by.·the
inSurance regulators, insurance brokers, and insurance buyers said that while
Feaet:al·••·~rVe.:.~d···.TJ:easury. AIG may be pricing somewhat more aggressively than in the past in order to
We8JSOi.Jltemewedoftici8J.s
frQillt:1l~:Q~C)ns • aS.wen retain business in light of damage to the parent company's reputation, they did
8S.• itldUStij·.:P8rticlPanfs not see indications that this pricing was inadequate or out of line with
(C().1if,9J:S,bro:k~,and previous AIG pricing practices. Moreover, some have noted that AlG has lost
~1l1ersJand~ce business because ofthe problems encountered by its parent company. As
regul8tOrs,···arnollg•• Otbers. GAO evaluates these issues, it faces a number of challenges associated with
determining the adequacy of commercial property/casualty premium rates,
especially in the short tenn. TheSe challenges include the unique) negotiated
nature of many commercial insurance policies, the subjective assumptions
involved in determining premiums, and the fact that for some lines of
commercial insurance it can take several years to detennine if premiums
charged were adequate for the related losses..
View GAO..09-490T or key components.

For mOte.lnformaUon,. contact 0rIce M.
WlHlain8af(202) 512-88785555 or
williamsoOgao.gov.
_ _ _ _ _ _ _ _ _ _ _ _ _ Unlted State. Govemment Accountability Office
T002052
Mr.Chainnan and Members of the Subcommittee:
I appreciate the opportunity to participate in today's hearing to provide

preliminary obselVations on the federal government's assistance to the
American International Group (AIG)-a large financial conglomerate with
an estimated 70· U.S. insurance companies-and the potential impact of
this assistance on U.S. insurance matkets, especially the commercial
property/casualty insurance market. 1 As you lmow, the Board of
Governors of the Federal Reserve System (Federal Reserve) and the
Federal Reserve Bank of New York (FRBNY) provided assistance to AIG
in September2008 following its rating downgrade, which had prompted
collateral calls by its counterparties and raised concerns that a rapid
failure of the company would.further destabilize financial markets.
However,AIG's condition continued to decline, and in November 2008 the
Federal Reserve and the Department of the Treasury (Treasury) under the
newly created Troubled·Asset Relief Program (TARP)announced plans.to
restructure AIG's··federal. assistance to further strengthen its financial
condition and, once again,prevent the failure. of the company_ On March 2,
2009, the Federal Reserve and Treasury provided addiUonal assistance and
further restructured the terms, which raised questions about the ongoing
viability of the company and the likelihood that the federal assistance
could be repaid.
The assistance provided to AIG has also raised questions among AlG's
competitors about whether the assistance provided to AIG's parent
company is being used to benefit its insurance companies. AlG's
competitors have argued that the assistance has allowed MG's insurance
companies to price coverage aggressively compared to the premiums
being charged by the rest olthe market, thereby providing AIG with a
competitive advantage, particularly in commercialproperty/casualty
insurance markets.
My statement today focuses on the preliminary results of our ongoing

review of the federal financial assistance to AlG and its impact on the U.S.
property/casualty insurance. market, initiated at the request of Ranking
Member Bachus (full committee) and Chainnan KarUorski
(subcommittee). Specifically, I will discuss (1) the goals and monitoring of
the federal govermnent's assistance to AlG, the associated setbacks, and
1AIG comprises at least 223 companies and it has operations In 130 countries and
jurisdictions worldwide.
Pille I GAO·09·49ar
T002053
chaUenges.to AIG's repayment of this assistance and (2) the potential
effects of this federal assistance to AIG on the U.S. insurance market,
especially the commercial property/casualty market..
To achieve these objectives, we analyzed publicly available reports,

congressional·testimonies, and other documentation issued by the Federal
Reserve, FRBNY, Treasury, Securities and Exchange Commission,
Congressional Research Service, and rating agencies. We also conducted
numerous interviews with o:ft1cials and staff from the Federal Reserve,
FRBNY, Treasury, three state insurance regulators with major roles in
regulating AIGts insurance companies, the National Association of
Insurance Commissioners (NAIC), five insurance brokers, four large
commercial property/casualty insurers that compete with AlG, two
reinsUrers, three. rating agencies, two industry obselVers, and an
association representing purchasers of commercial property/casualty
insurance. Finally, we consulted with a group ofactuaries to discuss our
methodology, bolster our understanding of insurance markets, and
evaluate what we heard from others..
We conducted our work from January 2009 to March 2009, in accordance

with all sections of GAO's Quality Assurance Framework that are relevant
to our objectives. The framework requires that we plan and perform the
engagement to obtain sufficient and appropriate evidence to meet our
stated objectives and discuss any limitations in our work. We believe that
the fufonnation and data obtained, and the analysis conducted, provide a
reasonable basis for our preliminary findings and conclusions.
Federal financial assistance to AIG, both from the Federal Reserve and
Summary FRBNY through their authority to lend funds to critical non-bank entities
in certain circumstances and from Treasury's TARP, has focused on
preventing the systemic risk that could result from a failure or further
rating downgrade at AlG. The goal ofthe initial assistance and subsequent
restructurings was to prevent systemic risk from the failure ofAIG by
allowing AIG to sell assets and restructure its operations in an orderly
manner. The Federal Reserve has been monitoring AIG's operations since
September, and Treasury will more actively monitor AIG's operations as.
well. Although the ongoing federal assistance ·has prevented further
downgrades in AIG's credit rating, AIG has had mixed success in fulfilling
its other restructuring plans, such as tenninating its securities lending
program, selling assets, and unwinding its AIG Financial Products (AIGFP)
portfolio.. For example, AIG has made efforts at selling certain business
units and has begun an overall restructuring, but market and other
Page 2 GAO·0949OT
T002054
conditions have prevented significant asset sales, and most restructuring
efforts are still under way. AIG faces ongoing challenges from the
continued overall economic deterioration and tight credit markets. AIG's
ability to repay its obligations to the federal government haS also been
impaired by.its deteriorating operations, inability to sell its assets· and
further declines in its assets. All ofthese issues will continue to adversely
impact AIG's ability to repayits government assistance. Table 1 provides
an overview of the total federal investment in AIG of $182.5 billion as of
March 2, 2009.
Table 1: Amounts of AIG Federal Asslstance.Used and Authorized as of March 2. 2009
Amount Total Amount

Date Program Announced Bo"ow~sed Autho~zed
Program Title (dollars In milliOns) (dollars In millions) Transaction Details
Federal Reserve Bank of New York (FRBNY)
September2008 $41,969-" $60,OOOb,d Revolving loan for the general corporate
Revolving Credit Facility purposes of AIGand.its subsidiaries,
and·to pay obligations.as.they come
due. In September this comment was
$85. billion but was reduced to $60
billion. By the end of the March 2009
the amount will be reduced to no less
than $25 billion.
November 2008 19,500 22,500 FRBNY extended credit to Malden Lane
Maiden Lane II LLC II to purchase residential mortgage-
backed securities from the U.S.
securities lending portfolio ofAIG
subsidiaries.
November 2008 24,300 30,000 FRBNY extended credit to Maiden Lane
Maiden lane III LLC III to purchase multi-sector
collateralized debt obligations on which
AIG Financial Products had written
credit default swaps.
March 2009 o (8,500t FRBNY loan to special purpose vehicles
Securitization of domestic life insurance cash (SPVs) established by domestic life
flows insurance subsidiaries of AIG. The
SPVs would repay the loans from the
net cash flows they receive from
designated blocks of existing life
insurance policies held by the parent
insurance companies.
March 2009 (26,OOO)d Preferred interests in two SPVs created
Preferred stock in foreign Ufe companies to hold all of the outstanding common
stock of two life insurance holding
company subsidiaries of AIG.
Page 3 GAO-G9-49OT
T002055
Amount Total Amount
Date Program Announced BorrowedlUsed Authorized
Program Title (dolla,. In millions) (dolla,s In millions) ,Transaction Details
U..S. Treasury Departmenr
November 2008 40,000' 40,000 AIG issued series 0 preferred stock to
Series 0 Preferred Stock Treasury and proceeds of $40 billion
were used to pay down AIG'sRevolving
Credit Facility balance.
March 2009 30, 000 This facility will be available for AIG to
Equity Capital Facility' draw down cash as needed over time in
eXchange for non-cumulative preferred
stock to the U.S. Treasury.
Credit Facility Trust
September2008 0.5 Shares of convertible· preferred stock
Series C Preferred Stock representing an approximately n.9
percent equity interest. in AIG.
Total $182,500
Source: FedeIal Reserve, Treasury. and AIG data.
Notes:
-rile debt outstanding in the Revolving Credit FacUity Includes accrued interest and has been reduced
by the $40 billion AIGreceived from issuing preferred stock to Treasury..
~e Revolving Credit Facility was initially authorized for up to $85 billan but was reduced to $60
billion in conjunction with the $40 billion paydown of the outstanding debt, The amount of this facility
will be reduced to no less than $25 billion by the end of March 2009 based on the lenns of the March
2 restructuring (see notes c and d)..
ortIe proceeds from the new loans to SPVs established by domestic life insurance subsidiaries of AIG
wHl be used to pay down an equivalent amount.ot outstanding debt under the Revolving Credit
Facility up to an aggregate of about $8.5 billion. Therefore, this amount does not affect total
authorized amount outstanding.
"The revolving credit facility is to be reduced by up to about $26 billion in. exchange· for preferred
interest in two SPVs created to hold all of the outstanding common stock of two life insurance holding
company subsidiaries of AIG. TheRi)fore. this amount does not affect total authorized amount
outstanding.
-rreasury provided the assistance under the Troubled Asset Relief Program's (TAAP) Systemically
Significant Failing Institutions (88Ft) Program.
trhe $40 billion was used to reduce the outstanding amount of the Revolving Credit Facility. The
outstanding amount of $42 billion reflects that reduction. As announced in the March 2. 2009
restructuring plan, the Treasury wi. exchange its existing $40 billion cumulative perpetual preferred
shares for new preferred shares with revised terms that more closely resemble common equity..
'As of March 16,2009, Treasury was still in the process of finalizing the terms of this facility.
'This excludes the $14 billion obtained from the Commercial Paper Lending Facility.
As part of our ongoing work on AIG, we are reviewing the potential impact
of AIG's federal assistance on the commercial property/casualty insurance
market. Specifically, we are reviewing potential effects on AlG's pricing
practices. According to some of AIG's competitors, federal assistance to
AIG has.allowed AIG's commercial property/casualty insurance companies
to offer coverage at prices that are inadequate for the risk involved.
Page 4 GAO-G049OT
T002056
Conversely, state insurance regulators, insurance brokers,· and insurance
buyers said that while AIG may be pricing somewhat more aggressively
than in the past in order to retain business in light of damage to the parent
company's reputation, they did not see indications that this pricing was
inadequate or out of line with previous AIG pricing practices. Moreover,
some have noted that AIG has lost business because of the problems
encountered by the parent company. As we evaluate these issues, we face
a number of challenges associated with determining the adequacy of
commercial property/casualty premium rates. For example, the terms of
the policy are often negotiated, and pricing adequacy is ultimately
detennined by future losses.
AIG is a holding company that, through its subsidiaries, is engaged in a

Background broad range of insurance and insurance-related activities in the United
States and abroad, including general insurance, life insurance and
retirement services, financial services, and asset management The AIG
organization includes the largest domestic life insurer and the second
largest domestic property/casualty insurer, and it has a large foreign
general insurance business. It also has a financial products division, which
has been a key source ofAIG'sfinancial difficulties, particularly AIGFP,
which engaged in a wide variety of financial transactions, including
standard and customized financial products.
AIG's Financial Problems From July 2008 to August 2008, ongoing concerns about AIG's securities
Mounted Quickly lending program and continuing declines in the value of super senior
collateralized debt obligations (CDO) protected by AIGFP'ssuper senior
credit default swap (CDS) portfolio, aIongwith ratings downgrades of the
CDOs) resulted in AIGFP having to post additional cash collateral, which
raised liquidity issues.! By early September, collateral postings and
securities lending requirements were placing increased pressure on the
AIG parent company's liquidity. AIGattempted to raise additional capital
&rhe securities lending program allowed insurance companies, primarily the life insurance
companies, to lend securities in return for cash collateral that was invested in residential
mortgage-backed securities (RMBS). When the value of these. securities declined in 2007,
AIG incurred significant losses when it had to return the cash collateral when its borrowed
securities. were returned. Collateralized debt obligations.are securities.bacl<ed by a pool of
bonds, loans, or other assets. Credit default swaps are bilateral contracts that are sold over
the counter and transfer credit risks from one party to another. The seller, who is offering
credit protection, agrees, in return for a periodic fee, to compensate the buyer, who is
purchasing it, if a specified credit event, such as default, occurs.
Pagel GAO-09-49OT
T002057
in September but was unsuccessful. It was also unable to secure a bridge
loan through a syndicated secured lending facility. On September 15, 2008,
the rating agencies downgradedAIG's debt rating three notches, resulting
in the need for an additional$20 billion to fund its additional collateral
demands and transaction tenninationpayments. As·AIG's share price
continued to fall following the credit rating downgrade, counterparties
withheld payments and refused.to transact with AIG. Also. around this
time, the insurance regulators no longer allowed AlGts insurance "
subsidiaries to lend funds to the parent under a revolving creditfacility
that AIG maintained and demanded that any outstanding loans be repaid
and that the facility be. tenninated.
Overview of Federal Ongoing instability in.global.credit markets and other issues have resulted
Assistance Provided in over $182 billion in federal assistance being made available to AIG.
First, in September 2008, the Federal Reserve created the Revolving Credit
Facility, which was intended to stabilize AlG by providing it with sufficient
liquidity and enabling AIG to dispose of certain assets" in an orderly
manner while avoiding Wldue disruption to the economy and financial
markets (see table 2). The original amount available under the facility was
up to $85 billion. While the amount borrowed reached $82 billion, the debt
was reduced by the proceeds from AlG's sale of preferred shares to
Treasury as well as repayments from the Fed Securities Lending
Agreement and the Commercial Paper Facility. As of February 18, 2009,
AlG had $38.8 billion in debt outstanding under this facility.
Table 2: Use of Federal Funds and Borrowings Outstanding from the Federel
Re.erv.Sankof New York Revolving Credit Facility 88 of February 18, 2009
Total
Borrowings: (millions)
Loans for AIGFP to post for collateral required by Its counterpartieson $47,547
credit default swaps and postlngs, guaranteed investment agreements
(GIA) and payment of other maturing debts
Capital contributions to insurance companies· 20,850
Repayments of obligations to life companies in securities lending program 3,160
Repayments of short-term inter-company loans by annuity and life 1,528
companies to parent company
Contributions to AIGCFG subsidiaries· 1,686
Repayments of AIG non-federal debt of AIG parent company 2,319
Funding for AIG's Equity interest in Maiden Lane Illb 5,000
Subtotal $82,090
Pagel GAo-o9-49OT
T002058
Total
Borrowings: (millions)
Repayment of Fed facility from proceeds of issuance of Series 0 (40,000)
Preferred Stock
Repayments of Fed facility from other sourcesc (6,890)
Net borrowings $35,200
Accrued compounding. interest and fees 3,631
Total balances outstanding
Source.: Ala Form 1D-Qfor Sept. 30, 2008. Fonn 1o-K for Dec. 31, 2008.
Notes:
-During 2008 and through February 27, 2009, AIG contributed capital of $22.7 billion (including $18.0
billion borrowed under the Fed Facility) to its Domestic Ufe Insurence and Domestic Retirement
Services subsidiaries. AIG also· contributed $4.4 billion to the Foreign ute Insurance companies
during 2008 including $4.0 billion from borrowings under the Fed FacUlty).
bAIG purchased its equity stake in Maiden Lane III with money borrowed from the Federal Reserve
Bank of New York's facility.
clncludes repayments from funds received from the Fed Securities Lending Agreement and the
CornmercialPaper Funding Facility.
dAccordlng to the Federal Reserve, the Revolving Credit Facility balance was $42 billion as of March
2, 2009, but AIG's 10-K provided details as of February 18, 2009.
Second,. in November 2008, the Federal.Reserve and Treasury announced

additional assistance to AIG and restructured its original assistance. On
November 9, 2008, the Treasury announced plans to use its Systemically
Significant Failing Institutions (SSFI) Program, under TARP, to purchase
$40 billion in AIG preferred shares.. This purchase allowed AIG to reduce
its debt outstanding to the Federal Reserve and enabled the Federal
Reserve to reduce the amount available under the Revolving Credit
Facility from. $85 billion to $60 billion. On November 10, 2008, ·the FRBNY
announced plans to lend up to $22.5 billion to Maiden Lane n LLC, a
facility fonned to purchase residential mortgage-backed securities (RMBS)
from the U.S. securities lending investment portfolio of AIG subsidiaries.
When this facility was established, it replaced an interim securities lending
agreement with the Federal Reserve. Also on November 10, FRBNY
announced plans to lend up to $30 bllHon to Maiden Lane LLC, a m
FRBNY facility fonned to purchase multi-sector eDOs on which AIGFP
had written CDS protection. In connection with the purchase·of the CDOs,
AIG'sCDS counterparties agreed to tenninate the CDS contracts.
Most recently, on March 2, 2009, the U.S. Treasury and FRBNY announced
plans to further restructure the tenns of the assistance. Consistent with
earlier assistance, this was also designed to enhance the company's capital
and liquidity in order to facilitate orderly restructuring of the company.
The restructuring of the assistance would, among other things, provide the
Page? GAO-09-49OT
T002059
government with interests in two AIG foreign life insurance companies, as
well as certain cash flows from certain domestic insurance companies,
each in exchange for reducing AlG's Revolving Credit Facility balance. The
assistance also would include a new Treasury equity capital facility that
would allow AlG to draw down up to $30 billion as needed over time in
exchange for newly issuednon-cumulative preferred stock to the U.S.
Treasury. Treasury and FRBNY would also exchange the previously issued
Series DprefelTed stock for Series E prefelTed stock that would more
closely resemble common stock and provide for non-cumulative
dividends. To date, AlG has not drawn against this facility.
As noted above, some federal assistance was designated for specific

purposes, such as reducing the loan outstanding to the Federal Reserve ox-
for purchasing specific assets, such as CDOs and RMBS. Other assistance,
such as that available through the Federal Reserve Revolving Credit
Facility, is available to meet the general financial needs of the parent
company and its subsidiaries. Some of the assistance also places
restrictions on actions that AIG can take while it has loans outstanding to
the federal government or as long as the federal government has an
ownership interest in AlG assets, as well as restrictions on executive
compensation. Executive compensation restrictions for TARP recipients
were also included in the American Recovery and Reinvestment Act of
2009, which was enacted on February 17, 2009. In general, the restrictions
prohibit
• bonus and incentive compensation payments to certain employees,

depending on the amount of TARp· assistance received;
• golden parachutes; and
• compensation plans that encourage risk-taking.
See appendix I for a detailed chronology of events.
Page 8 GAQ-09-49OT
T002060
Federal assistance to AIG has been focused on preventing systemic risk
Federal Efforts Have from a potential AIG failure and monitoring its progress, but AIG faces
Focused on challenges in repaying the assistance. Federal Reserve and Treasury
officials. have said that a failure of AlG, potenti.allytriggered by further
Maintaining and credit downgrades or additional collateral calls, would result in liquidity
Monitoring AIG's concerns for other financial market participants. A disorderly failure of
AIG would not only create difficulties for AIG'scounterparties as
Solvency, but AIG described, but could further erode confidence in and uncertainty about the
Faces Challenges in viability of other financial institutions. TIns, in tum, would further
Repaying Federal constrict the flow of credit to householdsandbusinesses,.potentially
deepening,. and lengthening the current recession. If the ultimate goal is
Assistance avoiding the failure of AIG, the Federal ReselVe and Treasury have
achieved that goal in the short-tenn. However, maintaining solvency has
required federal assistance beyond that provided in September and
November 2008, and rating companies have stated that their current
ratings are contingent on continued federal support for AlG. AIG and
federal regulatorsaclmowledge that there may be a need for further
assistance given the significant challenges AIG continues to face.
Therefore, more time is required to detennine if the goal will be fully
achieved in the long-term.
Federal and State We asked Treasury and the Federal Resetve how they were monitoring
Monitoring Efforts Are AIG's progress toward reaching the goals of the federal financial
Focused on AIG Solvency assistance and AIG's compliance with the restrictions placed upon it as a
condition of receiving the assistance. According to Treasury and Federal
ReselVe officials, the agencies are working together to monitor AIG's
solvency by reviewing the reports required by the tenus of the financial
assistance, and the Federal Reserve is in contact daily with AIGofficials
regarding AlG's liquidity needs and their efforts to sell the company's
assets. AIG regularly files several reports with FRBNY, including daily
cash flow reports,reports identifying risk areas within the company, and
daily liquidity requestslcashflowforecasts, allowing the Federal Reserve
to monitor AIG's liquidity. Also, AIGhas a divestiture team that meets at
least weekly with the Federal Reserve to discuss potential sales deals,
including bids from potential buyers,tinancing, and other tenus of sales
agreements, so that the Federal Reserve can monitor AIG's efforts to sell
its assets.
The Federal Reserve and Treasury said that they are monitoring the
various federal agreements with AIG, and these agreements place
restrictions on AIG's use olthe funds. For example, the Federal Reserve
monitors restrictions on the Revolving Credit Facility, including whether
Page 9 GAO-09-49OT
T002061
AIG has inappropriately paid dividends or financed extraordinary
corporateactionsllke acquisitions. According to Treasmy officials, it is in
the process of finalizing new executive compensation requirements based
on the American Recovery and Reinvestment Act of 2009, and will begin
monitoring AIG's compliance with those regulations once they are in
place. This is an area we will continue to monitor as part of our broader
TARP oversight.
State insurance regulators are responsible for monitoring the solvency of

insurance companies generally, as well as for approving transactions
regarding those companies, such as changes in control or significant
transactions with the parent company or other subsidiaries. For example,
regulators told us thatAiG's insurance companies, like all insurance
companies, file quarterly reportswith·them. Since AIG began receiving
federal assistance in September 2008, regulators also said that AIG's
insurance companies have been submitting additional reports on their
liquidity, investment income, and statistics on.surrender and renewal of
policies, sometimes on a daily orweeldy basis. The various regulators also
coordinate their monitoring of the companies' insurance lines. State
regulators·also evaluate potential sales of AlGts domestic insurance
companies. NAIC fonned a working group designed to expedite any
regulatory approvals required· for asset sales, with a goal of completing the
approvals within 45 days of filing for a sale"
AIG Faces a Number of AIG's restnlcturing has hinged on efforts in three areas: (1) tenninating its
Challenges to Its Ability to CDS portfolio, (2) tenninating its securities lending program,and (3)
Repay Its Federal Funds selling assets. Federal assistance was targeted to the first two areas that
posed a significant risk to AIG's solvency-AlGFP's CDS portfolio and the
securities lending program-and the risks from both activities appear to
have been reduced, but some risks remain.. One arrangement, Maiden Lane
ill-the FRBNY facility created to purchase CDOs-has purchased
approximately $24..3 billion in multi-sector COOS (with a par value of
approximately $62 billion), which were the assets underlying the CDS
protection that AlG sold. Concurrent with the purchase of the underlying
CDOs, AIGFP counterparties agreed to cancel the CDS written on the
CDOs, thus unwinding significant portions of A1GFP's CDS portfolio.
According to AlG, some arrangements did not qualify for sale to the
facility, generally either because the counterparties' did not own the
instruments on which CDS were written or because they were in
denominations other than U"S. dollars. As of February 18, 2009,
approximately $12.2 billion in notional amounts of CDS remained with
AIG. According to AlG, these remaining CDS continue to present a risk to
Page 10
T002062
AIG, as further losses from these assets could require additional funding. A
secondFRBNYfacility-Maiden Lane II-purchased approximately $19.5
billion in RMBSandotherassets related to the securities lending program.
Both the Maiden Lane IT and Maiden Lane ITI facilities allow AIG to
participate in the residual proceeds after the FRBNY loan has been repaid.
However, AIG faces other potential losses from other investments.,
The federal assistance has allowed AIG to undertake restructuring efforts,

which continue. As of September2008, AIGwas to wind down the
operations of AIGFP and sell certain businesses. In October 2008, the
company announced plans to sell some of its life insurance operations and
other businesses. AIG is continuing to wind down AIGFP but expects the
process to take at least several years in order to avoid further losses given
the current market conditions. AIG has been unable to sell itsiiasurance
assets for prices it deems acceptable given the general state of the global
economy. As a result, the plan has been modified, and the federal
government will now assume an ownership interest in some ofAIG's life
insurance companies. The federal government's ownership stake will be a
percentage, of the fair market value of these companies based on
valuations acceptable to the Federal Reserve. In addition, AIGpians to
consolidate its commercial property/casualty insurance operations in a
free-standing entity and potentially offer an equity interest in part of this
new entity to public investors.
Asset sales have beendifticult, not only because tight credit markets are
,limiting buyers' ability to obtain the capital needed to purchase the
companies, but also because of challenges faced by AIG in retaining key
employees, who, contribute to the value of the company. In addition, the
timely sale of CDOs and RMBS held by the Federal Reserve facilities will
be challenging, not only because it may be difficult to value those assets,
but because many are tied to home values, which have been in decline.
AIG's ongoing financial problems have resulted in additional assistance

and restructuring of'the tenns of the original assistance, andAIG faces
numerous, significant challenges to its ability to repay federal assistance in
the future. AIG's ability to repay the federal government hinges on it
remaining solvent and effectively restructuring the organization, including
the sale of subsidiaries. The federal government recouping its assistance
also depends in parton FRBNY being able to obtain a satisfactory return
on the sale of the CDO- and RMBS-related assets purchased by Maiden
Lanenandm.
Page 11 GAO-09-49OT
T002063
AIGts ability to pay interest and dividend payments has been and may
continue to be a challenge because its ability to make payments is
dependent on the profitability of AIG operations, which face a number of
hurdles. As of December 31, 2008, AIG.insurance subsidiaries had
statutory capital levels that exceeded the minimum requirements.
However, damage to AIG'sreputation has made it difficult for its insurance
companies to maintain current business 'and, write new business. In
addition, profitability is also dependent on the overall state. of the
economy-many of AIG'sinsurance premium sources are tied to
economic activity, such aspayroll-and its insurers, especially its life
insureIS, depend on strong investment returns. To the extent the overall
economy is experiencing difficulty, it will present challenges to the
profitable operations of AIG's·insurance companies. While recent federal
assistance has been restructured to reduce AIG's interest and dividend
payment requirements, it is too soon to ten whether further assistance or
further restructuring will be needed in the future.
We. are examining the potential effect of federal assistance to AIG on the
Some of AIG's insurance market, particularly AIGts pricing practices within the
Competitors Claim commercial property/casualty market. Market participants. (actuaries,
regulators, brokers, customers, and insurance companies) we talked with
thatAIG's indicated that, foremost, insurance premium rates follow an insurance
Conunercial underwriting cycle that is generally characterized by a long period of "soft
Insurance Pricing Is market" conditions, where premium rates are relatively low and
underwriting standards are less stringent, followedbya much shorter
Out of Line With Its period of "hard market" conditions, where premium rates flatten or
Risks but Other increase and underwriting standards are more stringent. They explained
that starting with the September 11,2001. terrorist attacks and continuing
Insurance Industry until late 2003 or early 2004, the commercial property/casualty market was
Participants and in a hard market, but since this time the markets have softened and
premium rates have been declining.. For example, according to the Council
Observers Disagree of Independent Agents and Brokers (CIAB) surveys,. quarterly changes in
commercial property/casualty premium rates have been negative (falling)
for all commercial line accounts since the second quarter of 2004 (except
for catastrophe-exposed property lines in early 2006), and while the
magnitude of the changes leveled off in the last quarter of 2008, the
average quarterly premium rate change was still negative in that period.
Industry participants also said that premiums charged by commercial

property/casualty insurers for a given coverage are influenced by several
factors that could allow one insurer to price lower than another on a given
risk and that AIG Commercial Insurance historically had been able to take
Page 12 GAo.09-49OT
T002064
advantage of several ofthese factors. Such factors includea·long.history
of experience with complex risks, a lower operating expense ratio relative
to· competitors, global operations that allow offsetting risks, and the ability
. to leverage the size and the financial strength of the parent company to .
write larger coverage amounts than competitors, in some cases without
the need to purchase reinsurance. It is not yet clear to what extent the
current financial difficulties·the AIG parent company may have diminished
these advantages for AIG Commercial Insurance.
Some insurers we spoke with said that they had observed instances, in
some cases nwnerousinstances, where AIG had sold commercial
property/casualty coverage for a price that these insurers believed was
inadequate for the risk involved. They cited examples where AIG
Commercial Insurance's prices had decreased significantly from the prior
year's price, when circumstances appeared to indicate that higher prices
were warranted. Some insurers said that they had brought seve~.ofthese
instances to the attention of the relevant state insurance regulator.
Insurers expressed concern that while current market conditions would
dictate increased prices in most commercial property/casua1tylines of
insurance, they believe that AIG Commercial Insurance has decreased its
prices. They·added that when such pricing activity is combined with AIG
Commercial Insurance's market power, AIG Commercial Insurance can
prevent prices from increasing and thus hurt other insurers' ability to price
insurance at a cost adequate to cover the risk involved. The insurers said
they believed that AIG Commercial Insurance's recent pricing behavior is
the result of its desire to .retain existing business in the face ·of concerns
over the financial health of its parent company, and some suggested that
the federal financial assistance is providing them the means to do this. For
example, some suggested that AIG Commercial Insurance officials lmow
that the federal government will not let them fail, so they can charge very
low prices without fear of the consequences when the premiums collected
turn out to be l,ess than the losses those premiums were meant to cover.
Some also suggested that buyers in the market are choosing to stay with
AIG Commercial Insurance because they also believe that the insurance
company is now backed by the federal government and that their losses
will ultimately be covered.
AIG told us that AIG Commercial Insurance has the biggest policyholder
surplus in the industry and that they are solvent and financially sOWld.
They maintained that they are charging prices adequate for the risk being
covered and that their commercial insurance rates have been mirroring
the overall trends in the current soft market. That is, they indicated that
their rates have been declining at an increasingly slower pace since the
Pqe13 GAO-09-49OT
T002065
fourth quarter of 2008, and in some cases have increased. They also cited
other factors that they said would indicate that they were not pricing
. inadequately or taking market share from other companies. First, AlG
Commercial Insurance told us that they have actually been losing market
share because the financial situation of the parent company had impacted
the reputation of the AIG commercial insurance companies. In addition,
they cited instances where competitors were using the AIG parent
company's financial problems as a way to discourage customers from
buying AIG conunercial insurance.coverage. Finally, AIG Commercial
Insurance provided us with examples of recent contracts that they have
lost to competitor bids that were below their own. However, AIG
Commercial Insurance aclmowledges that these examples reflect the
nature of the business, not necessarily inappropriate pricing by the
competitors.
State insurance regulators, insurance brokers, and insurance buyers that

we have spoken to said that they have seen no indications that AIG's
commercial property/casualty insurers are selling coverage at prices
inadequate to cover the risk involved:
• State insurance regulators we spoke to said that they generally do not

closely watch commercial insurance rates because they may have been
largely deregulated by the states, as well as because of the highly
negotiated nature and complexity of many commercial lines of insurance.
However, they said that they investigate complaints about pricing
activities and monitor insurer solvency measures that would indicate
inadequate pricing-although in some lines the consequences of such
pricing may not show up in these measures for several years. State
regulators indicated that complaints of pricing inadequate for the risk
involved would need to be nmnerous enough to indicate a potential
systemic problem or would need to prove an intentional predatory
strategy from the part of a particular company. Based on what they have
reviewed, the regulators we spoke with said they have seen no indications
of inadequate pricing by AIG's commercial property/casualty insurers.
• Insurance brokers we spoke with said that when helping a customer

obtain coverage, they see all of the prices and conditions offered by each
insurer placing a bid on that coverage. They also indicated that
commercial property/casualty insurance is competitive, and that in several
lines of commercial insurance, especially where large coverage amounts
are involved, prices offered by insurers can deviate significantly on the
same risk. For example, one broker said that insurers' bids on large
policies regularly vary by as much as 20 percent below and above the
median bid. Several brokers told us that AIG Conunercial Insurance has
Page 14- GAo-09-49OT
T002066
historically priced aggressively in some lines, and that while in some
instances in the past several months AIG Connnercial Insurance may have
priced more aggressively in order to retain certain customers, it did not
appearto be a widespread practice and was viewed as an expected
response given the reputational hit the company has taken. They also cited
instances where AIG Commercial Insurance has lost business because
other insurers' prices were'lower than theirs.
• Insurance buyers, who also see all of the prices and conditions offered·by
each insurer bidding on their coverage, said that AIG Commercial
Insurance is known to be competitive,in some lines and that they have not
seen any indications of a widespread change in pricing by AIG's
commercial insurers.. They also said that they would recognize,and be
concerned about, an insurer charging suspiciously low rates for the
coverage because it would create a risk that the insurer would be unable
to pay the policyholder's claim.
However, according to insurance regulators and other industry

participants, for many lines of commercial insurance, detennining whether
prices charged by a commercial property/casualty insurer are adequate for
the risk involved pose a number of challenges:
• In many lines of commercial insurance, in the case of very large risks as

opposed to routine policies, the terms of coverage, in addition to the price,
are often negotiated, resulting in unique policies.. For example, the amount
of a claim the policyholder would be responsible for, and the collateral the
policyholder would be required to post to guarantee payment of this
amount, would be negotiated. Without knowing all the tenns of an
individual policy, it could be difficult to detennine the extent to which that
policy was priced adequately for the risk involved
• Insurers price policies based on predictions of future losses, which

contain a number of subjective assumptions about risk, interest rates,
litigation costs, and other costs.. Underwriters may price a given risk
differently and still be able to defend the reasoning behind their
calculations.
• The most concrete indication of systematic inadequate pricing comes

several years later, depending on how far into the future the losses
associated with the policies in question are realized. However, a company
may ultimately end up withhigher-than-expected losses even if it charged
actuarially detennined premiums using reasonable assumptions at the
time the policies were written.
Page 15 GAo-G949OT
T002067
In closing, the extent to which the assistance provided by the government
will achieve its goal of preventing systemic risk continues to unfold and
will be largely influenced by AIG's success in meeting its ongoing
challenges in trying to restructure its operations. LikewiseJit is too .soon to
tell whether AlG will be able to repay its outstanding debt to the federal
govenunent, which in large part depends on the stability of the overall
financial system. While we have found no evidence that federal assistance
has been provided directly to AIG's property/casualty insurers, as has been
the case for AIG life insurers, AIG's insurance companies have likely
received some indirect.benetit. to the extent that the property/casualty
insurers would have been adversely affected by a credit downgrade or
. failure of the AlG parent. While we are continuing to complete our work in
the area, some of AIG'scompetitors claim that AIG's conunercial
insurance pricing is out ofline with, its risks but other insurance industry
participants and observers disagree~ At this time, we have not drawn any
final conclusions·about how the assistance has impacted the overall
competitiveness of the commercialproperty/casualty market.
Mr. Chairman, this completes my prepared statement. I would be pleased

to answer any questions that you or Members of the Subcommittee may
have.
For further infonnation about this testimony, please contact Orlce M.

Contact and Williams at (202) 512-8678 or williamso@gao.gov. Contactpoints for our
Acknowledgements Offices of Congressional Relations and Public Affairs may be found on the
last page of this statement. Individuals maldng key contributions to this
testimony irlclude Patrick Ward (Assistant Director), Joe Applebaum
(Chief Actuary), Susan Offutt (ChiefEconomist), Silvia Arbelaez-Ellis,
Tania Calhoun, John Forrester, Dana Hopings, Jennifer Schwartz, and
Melvin Thomas.
Page 16 GAO-09-49OT
T002068
Appendix I - Timeline of AIG Financial
Difficulties Leading Up to Federal Assistance
• July 2008 to August 31, 2008:

• The super senior collateralized debt obligation (ODO) securities
protected by American International Group Financial Products'
(AIGFP) super senior credit default swap (CDS).portfolio continued to
decline and ratings of CDO securities were downgraded, resulting in
AIGFP posting additional $5.9 billion collateraL
• AIG was doing a strategic review of AIG's businesses and reviewing
measures to address the liquidity concerns in AIG's securities lending
portfolio and to address the ongoing collateral calls regarding AIGFP's
super senior multi-sector CDS portfolio, which as ofJuly 31, 2008,
totaled $16.1 billion.
• .Early September 2008: These collateral postings and securities lending

requirements were placing increasing stress on the AIG parent company's
liquidity.
•. September 8 to September 12, 2008: AIG's common stock price declined

from $22.76 to $12.14, making it unlikely that AIG would be able to raise
the large amotmfs of capital that would be necessary if AIG's long-tenn
debt ratings were downgraded.
• September 11 or 12, 2008: AIG approached the Federal ReseIVe with two
concerns:
• AIG had significant losses in the first two quarters of calendar year
2008, primarily attributable to AIGFP and decreasing values in their
securities, leading AIG to request to place large amounts of cash
collateral.
• AIG's investments in mortgage-backed securities (MBS) were very
illiquid. Consequently, AIG would not be able to liquidate its assets to
meet the demands of cotmterparties. Since AIG is not regulated by the
Federal Reserve, the agency was not aware of the company's financial
problems.
Also, because AIG was facing a downgrade in its credit rating the next
week,it needed immediate liquidity help.. Over the weekend, the Federal
Reserve was examining AIG to· determine if it was systemically important,
meaning that its failure would have a broader effect on the economy. This
was the same weekend that Lehman.Brothers went into bankruptcy..
• September 12, 2008:

• Standard & Poor's (s&P), placed AlG on CreditWatch with negative
implications and noted that upon completion of its review, the agency
could ~ the AIG parent companyts CUlTent rating of AA- or lower
the rating by one to tlu-ee notches.
Page 17 GAO..09-49OT
T002069
• AIG's subsidiaries, International Lease Finance Corporation (ILFC) and
American General Finance, Inc. (AGF), were unable to replace. all of
their maturing commercial paper with new issuances of commercial
paper. As a result, AlG advanced loans to these subsidiaries to meet
their commercial paper obligations.
• September 13 and 14, 2008: AIGaccelerated the process of attempting to

raise additional capital and discussed potential capital injections and other
liquidity measures with private equity finns, sovereign wealth funds and
other potential investors. AlG also met with Blackstone Advisory Services
LP to discuss possible options.

• AIG was again unable to access the commercial paper market for its
primary commercial paper programs, AlG Funding, ILFC and AGF. AIG
advanced loans to ILFC and AGF to meet their funding obligations.
• AIG met with representatives of Goldman, Sachs & Co., J.P. Morgan,
and the Federal Reserve Bank of New York (FRBNY) to discuss the
creation of a $75 billion secured lending facility.
• S&P, Moody's, and Fitch Ratings (Fitch) downgraded AIG's long-tenn
debt rating. ABa result,AIGFP estimated that it needed in excess of $20
billion to fund additional collateral demands and transaction
tennination payments in a short period of time.
• September 15, 2008: AIG's common.stock price fell to $4.76 per·share.

• AlG's strategy to obtain private financing failed. Goldman, Sachs & Co.
and J.P. Morgan were unable to syndicate a lending facility.
Consequently, counterparties were withholding payments from AlG,
and AIG was 1.Ulable to borrow in the short-term lending markets.
• To provide liquidity, both ILFC and AGF drew down on their existing
revolving credit facilities, resulting in borrowings of approxirnately$6.5
billion and $4.6 billion, respectively.
• AIG was notified by its insurance regulators that it would no longer be
pennitted to borrow funds from its insurance company subsidiaries
Wlder a revolving credit facility that AIG maintained with certain of its
insurance subsidiaries acting as lenders. Subsequently, the insurance
regulators required AlG to repay any outstanding loans under.that
facility and to tenninate it.
• The Federal ReseIVe extended the facility to AIG to prevent systemic
failure. AIG had no viable private sector solution to its liquidity issues.
It received the tenus of a secured lending agreement that FRBNY was
prepared to provide. AIG estimated that it had an immediate need for
Page 18 GA().09-49OT
T002070
cash in excess of its available liquid resources.. That night, AIG's Board
of Directors approved borrowing from FRBNY based on atenn sheet "
that set foIth the tt!rms of the secured credit agreement and related
equity participation.

• The inter-company facility was tenninated effective September 22,
2008.
• AIG entered into the Fed Credit Agreement in the fonn of a two-year
secured loan.
(210418)
Page 19 GAO-OS49OT
T002071
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T002072
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T002073
·Robertson, Terri {_C_O_"u_o_ac_t_o....f). _
From: Ferlazzo, Ronald
Sent: Thursday, March 19, 20094:32 PM
To: Hsu, Michael; Fu, Alan; Tae, Michael; lambright. Jame$
SubJect: GAO statement on AIG
Attachments: gao_-_williams[1].pdf
I assume that you all have this" but just in ease.

From: Wolfteich" Paul
Sent: Thursday" March 19" 2009 9:19 AM
To: Ferlazzo J Ronald
Subject: FW: gao_-_williams[l].pdf - Adobe Acrobat Professional
-----Orlginal Message-----
From: Oriee MWilliams [mailto:WilliamsO@gao.gov]
Sent : Thursday" March 19" 2009 9': 11 AM
To: Wolfteieh" Paul
Subject: gao_-_williams[l].pdf - Adobe Acrobat Professional
Paul"
Here 15 my statement on AiG.
Oriee
T002074
C_o_"_tr_ac_t_o...r!
McCarthy, Mary <.. _
To: Greene, Michelle
Subject: FW: FP
From: Hsu, Michael

Sent: Tuesday, March la, 2009 9:09 AM
To: Lambright, James; Albrecht, Stephen; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Subject: FP
CO NFl DENTIAL/PRE-DECISIONAL
Spoke last night to Mike Alix J the FRBNY lead on FP.
T002145
Sent: Mon Mar 09 20:38:04 2009 '
Subject: Fw: AIG Update
- Jim - in case the attached document hasn't already made its way to you -- this provides a summary of all AIG
compensation matters we've been dealing with. Pages 6 and 8 provide 'a quick overview of the issues we discussed
tonight. Jim . .
From: James.Hennessy@ny.frb.org [mailto:James,Hennessy@ny,frb.org]

Sent: Thursday, March 05, 2009 1:02 PM
Cc: Ferlazzo, Ronald
Subject: AIG Update
Steve,
As promised, attached .please find an overview of the AIG compensation issues, outlining what has tran$pired since
September and .matters that are in 'the hopper. 1would draw your attention to two pages in particular: . ' . ' .
(b) (4)
Many thanks,
Jim
212-720-8195
T002146
McCarthy, Mary (Contractor) -----
From: Hsu, Michael

Sent: Tuesday, March 10, 2009 11 :00 AM
Subject: RE:FP
Ron and I are on the line.
From: Lambright, James

To: Albrecht, Stephen; Hsu, Michael; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Subject: Re: .FP
Ok. On w.
Dialin:_

To: Hsu, Michael; Lambright, James; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Sent: Tue Mar 10 10:28:58 2009
Subject: RE: FP
Jim's. office again for the 11 am call?
From: Hsu, Michael

Subject: FP
CONFIDENTIAL/PRE-DECISIONAL
Spoke last night to Mike Alix} the FRBNY lead on FP. (b) (5)
T002147
From: James.Hennessy@nyJrb.org
Sent: Mon Mar 09 20:38:04 2009
Jim -- in case the attached document hasn't already made its way to you -- this provides a summary of all AIG
compensation matters we've been dealing with. Pages 6 and 8 provide a quick overview of the issues we discussed
tonight. Jim

Subject: AIG Update
)Steve,
As promised, attached please find an overview of the AIG compensation issues, outlining what has transpired since
September and matters that are in the hopper. I would draw your attention to two pages in particular:
T002148
Many thanks,
Jim
212':'720-8195
..
T002149
McCarthy. Mary (Contractor)~ _
From: Morse, Duane

To: Lambright, James; Albrecht, Stephen; Hsu, Michael; Ferlazzo, Ronald; Jaconi, Kristen
Subject: RE: FP
Duane D. M.orse
Chief Counsel - Office of Financial Stability
.Depaltment of the l'reasury
202-622-1192
Duane.Morse@Jdo.treas.gov

To: Albrecht, Stephen; Hsu,Michael; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Subject: .Re: FP
Ok. On pw.
Dialin:_.

To: Hsu,Michael; Lambright, James; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Sent: Tue Mar 10 10:28:58 2009
Subject:RE: FP
Jim's office again for the 11am call?
From: Hsu, Michael

Sent:· Tuesday, March 10, 2009 9:09 AM
Subject: FP
CO NFl DENTIAL/PRE-DECISIO NAL
Spoke last night to Mike Alix, the FRBNY lead on FP. (b) (5)
T002150
Sent: Mon Mar 09 20:38:04 2009
tonight. Jim

To: Albrecht,. Stephen
Subject: AIG Update
Steve,
b) (4)
T002151
M.any thanks, (b) (4)
Jim
212-720-8195
T002152
McCarthy, Mary (Contractor) _

Sent: Tuesd.ay, March 10,2009 10:34 AM
To: Albrecht, Stephen; Hsu~ Michael; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Subject: Re:FP
Ok. On w.
Dialin:_

To: Hsu, Michael; Lambright, James; Morse, Duane; Ferlazzo, Ronald; Jaconi, Kristen
Sent: Tue Mar 10 10:28:58 2009
Subject: RE: FP
Jim's office again for the11 am call?
Hsu, Michael
Subject: FP
Spoke last night to Mike Alix J theFRBNY lead on FP. (b) (5)
T002153
Sent: Mon Mar 09 20:38:04 2009
co.mpensation matters we've been dealing with. Pages 6 and 8 provide a quick overview of the issues we discussed
tonight. Jim

Subject: AIG Update
Steve,
T002154
Many thanks, (b) (4)
Jim
212-720-8195
T002155
Sent: Mon Mar 09 20:38:04 2009
tonight. Jim

Sent: Thursday, March OS, 2009 1:02 PM
Subject: AIG Update
Steve,
Many thanks,
Jim
212-720-8195
T002157

To: Hsu, Michael; Lambright, James; Morse, Duane; Ferlazzo, Ronald; Jaconi,. Kristen
Subject: RE: FP
Jim's office again' for the 11 am call?
From: Hsu/ Michael

Sent: Tuesday/ March 10/2009 9:09 AM
To: Lambright/ Jc;lmes; Albrecht/ Stephen; Morse/.Duane; Ferlazzo/ Ronald; Jaconi/ Kristen·
Subject: FP
T002156
C_o_n_tr_ac_t_o...
McCarthy, Mary (.. rl.... _
From: Hsu, Michael
Sent: Tuesday, March 10,20099:09 AM
Subject: FP
T002158
From: James. Hennessy@ny. frb. org

Sent: Saturday, February 28, 2009 9:33 PM
Cc: Sarah. Dahlgren@ny.frb. org
Subject: FP Employee Retention Program
Steve, between working on press releases, I've been trying to get a summary of all the AIG compensation issues
completed for you. I am aiming to send you something comprehensive by Tuesday. It will cover the past six months and
layout the issues for the company going forward.
Thanks,
·Jim
T002171
From: Lambright,James
To: Williams, Andrew
Subject: RE: today's story
No. don't know where he is, but I need him to do this exercise ...
From: Williams, Andrew

, Subject: RE: today's story
Did you hear from Steve?

To: Williams, Andrew; Albrecht, Stephen
Subject: Re: today's story
Steve, if you're free, we can go through this timeline and flesh out details. Just let me know.
From: Williams, Andrew

To: Albrecht, Stephen; Lambright, James
Sent: Tue Mar 17 10:34:34 2009
Subject: FW: tOday's story
Need some urgent help on the timeline of what we knew and when -'how can we do this?
(b) (5)
-
I
T002301
-
-
_ II
From: Solomon, Deborah [mailto:Deborah.Solomon@wsj.com]

Subject: today's story
Would it be possible for you or someone to walk me through the chronology of the AIG bonus? We're doing a story for
tonight about how the bonus situation unfolded -- when Treasury first knew about the need to make the payments, what it
did. once it found out, when Tim okayed the payments, etc.
Some of this I know but I'd like to have a conversation with someone at Treas to fill in some of the blanks.
I will be out until 12:30 but would love to set something up for early this afternoon.
Let me know if possible.
Deborah
********************************
T002302
Deborah Solomon
Staff Writer
The Wall Street Journal
1025 Connecticut Ave.
Washington, DC 20036
202-862-9289
T002303

CREW: Department of The Treasury: Regarding AIG Bonuses: 7/15/10 - 2009-03-124 - Binder 4

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CREW: Department of The Treasury: Regarding AIG Bonuses: 7/15/10 - 2009-03-124 - Binder 4

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"One thing is clear: Complaints that it was impractical, impossible or a waste of time to require banks to detail how they

used TARP funds wereunfounded,1I Barofsky said.

rassley Says Program Must Increase Transparency

From: CUtter, Stephanie

From: Gudmundson, Erika

Sent: Monday, March 16 2009 12:43 PM

To: Robertson William; _DL_FYI; _DL_Communications

Subject: Updated: AP-Obama: AIG cannot justify ·outrage' of bonuses

http~llnews.yahoo.com/s/ap/~ee90316/ap on go Dr wh/aig outrage/print

SaidOb.Clma: "All across the country, there at epeoplewhoworkhardHandmeetHtheir

responsibilities every day~ without the benefit of government bailouts or multimillion-dollar

From: Wolfteich, Paul

From: Kashkari, Neel

From: Wolfteich, Paul

From: Kashkari, Neel

From: Wolfteich, Paul

From: Kashkari, Neel

From: Abdelrazek, Rawan

Sig letter for review

From: Wolfteich, Paul

Thanks very much.

From: Wolfteich, Paul

From: Kashkari, Neel

From: Wolfteich, Paul

From: Abdelrazek, Rawan

Sig letter for review

From: Wolfteich, Paul

Thanks very much.

Sig letter for review

From: Wolfteich, Paul

Thanks very much.

Sent: Wednesday. March 18 20091:06 PM

To: Hsu, Michael

From: Hsu, Michael

From: Wolfteich, Paul

From: Wolfteich, Paul

From: Puvalowski, Kevin

i From: Hsu, Michael

From: Puvalowski, Kevin

From: Wolfte1ch, Paul

Neill Bryan -, (b) (6 >-

Forgot to include you...

From: Hsu, Michael

................... _.__ -------

From: Puvalowski, Kevin

From: Wolfteich, Paul

From: Puvalowski, Kevin

From: Hsu, Michael

Ok, will do.

From: Hsu, Michael

SUbject: RE: SIG update

From: Hsu, Michael

From: Albrechtr Stephen

Yes, Rawan sent it last night I've attached the email..

from: Cutter/ Stephanie

From: Albrecht, Stephen

If this is about AIG retention bonuses t

From: Kashkarl, Nee'

From: Cutter, Stephanie

from: Todd, Chuck 0 (NBC Universal) [mailto:Chuck.Todd@nbcuni.com]

Hir~ me some workers?

From: Toddt Chuck 0 (NBc Universal) [mallto:Chuck"Todd@rlbcunl.com]

· correspondent got to do to get you to return call/email?