The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
Jan. 08--Periodically, one comes across a jaw-dropping example of lawsuit abuse. The Good Samaritan gets sued for preventing a suicide, the robber takes the store clerk to court for fighting back, the B-list starlet sues because nobody watched her sex tape (apocryphal perhaps, but bound to happen someday).
But for size, breadth, ingratitude -- and sheer chutzpah -- it will be tough to beat what a group of executives is seriously contemplating on Wednesday. That's when the board of directors of American International Group, or AIG, will be reviewing whether to join a $25 billion lawsuit against the U.S. government on the grounds that the federal bailout of the insurance giant shortchanged shareholders.
It's possible some of us have missed the recent TV commercials AIG has been running under the "Thank you, America" theme to celebrate the fact the company has paid back the government for the bailout that began in 2008 and cost in the neighborhood of $182.5 billion. But rest assured, they don't mention anything about sticking a knife in the nation's back right after paying off the proverbial mortgage and bragging how it profited taxpayers.
Perhaps a bit of history is in order. Uncle Sam stepped in and essentially spared AIG from bankruptcy because many believed that failing to do so would lead to a global economic collapse, a 21st century remix of the Great Depression. The insurance firm got into trouble for backing all those credit default swaps that got hammered by the subprime mortgage mess.
AIG was the biggest of the "too big to fail" institutions. Saving it was essential to keeping U.S. financial markets afloat. The Bush administration knew it, the Federal Reserve knew it, AIG's board knew it, but for some reason a major AIG investor at that time, the company's former chief executive, Maurice R. Greenberg, believes he could have done better.
Mr. Greenburg filed his lawsuit last year, and that's his right -- as logic-defying as it is to believe that bankruptcy would have been kinder to shareholders, that perhaps the private equity sharks would have kept down interest rates or otherwise restrained themselves from taking full advantage of the company's losses.
But for the company (governed by a board appointed post-bailout to boot) to seriously consider joining this debacle? That's beyond infuriating or a case of biting the hand that fed them; it's entered the category of phenomena that can only be described with indelicate language unbecoming a general-circulation newspaper.
Lawyers say that the AIG board is duty-bound to at least consider this option, as repugnant as it might seem to the rest of the country. If they don't, they might be sued for failing to uphold their fiduciary duties to shareholders. And certainly, it's notable that the board will not only hear from Mr. Greenberg and his attorneys but has also reserved time for lawyers from the Treasury Department and Federal Reserve to make their rebuttal case, too.
Yet if somehow the unthinkable happens and AIG joins the lawsuit, one can just imagine the angry public reaction -- and ultimately the reaction on Capitol Hill. If anybody associated with the company thinks they were mistreated by the federal government back then, wait until they see what might be in store for these ingrates next.
How about an actual nationalization of the company instead of a bailout? How about a criminal investigation into the actions of those at AIG whose risk-taking placed the U.S. economy in such peril? How about a special tax on all profits of companies that have ever received multibillion-dollar bailouts from the government?
Surely, the partisan bickerers in Washington can pause a minute or two in their self-destructive infighting over the debt ceiling to turn their ruthless minions on AIG. Some punishment along the lines of HBO's "Game of Thrones" would do nicely. Now there's something that could really bring people together.
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