AIG Timeline Of Events
For all who want to get up to speed on next week's political theater involving AIG, Tim Geithner, Goldman Sachs' Stephen Friedman, Goldman Sachs' Bill Dudley, Goldman Sachs' Lloyd Blankfein, and the endless taxpayer bailouts, here is a terrific timeline for everything relevant to the AIG soap opera. Courtesy of Bloomberg.
Nov. 10, 2008: AIG says the New York Fed will contribute as much
as $30 billion to a facility to retire credit-default swaps sold
by the insurer to protect banks from losses on securities tied
to subprime mortgages. The insurer will contribute as much as $5
billion, and the facility, named Maiden Lane III, will buy about
$70 billion in collateralized debt obligations from the banks
that bought protection, AIG says.
Nov. 11, 2008: Elias Habayeb, then-Chief Financial Officer of
AIG’s Financial Services division, e-mails executives that he
wants to clear up “confusion” about the price the company will
pay to retire derivatives. “The Fed offered all counterparties
par,” Habayeb says. “I think we should be clear on that
Nicholas Ashooh, then-senior vice president in charge of
AIG’s communications, replies to Habayeb that his proposed
explanation “would be very helpful, but I understand that the
Fed is very sensitive and we have to clear it with them.”
Nov. 24, 2008: Geithner is nominated for Treasury secretary by
President-elect Barack Obama. Geithner is recused from “working
on issues involving specific companies, including AIG,” a
Treasury spokeswoman later says.
Nov. 25, 2008: Maiden Lane III begins buying CDOs from AIG’s
Dec. 2, 2008: AIG submits a regulatory filing detailing the
terms of the Maiden Lane III agreement.
The filing contains a so-called shortfall agreement between
Maiden Lane III and AIG listing terms of payments should the
vehicle need more funds. The accord refers to Schedule A, the
document listing counterparties, collateral postings and market
declines on the derivative contracts. The Schedule A isn’t
The filing states that on Nov. 25, “ML III bought
approximately $46.1 billion in par amount of Multi-Sector CDOs
through a net payment to CDS counterparties of approximately
$20.1 billion, and AIGFP terminated the related CDS with the
same notional amount. The aggregate cost of the purchases and
terminations was funded through approximately $15.1 billion of
borrowings under the Senior Loan, the surrender by AIGFP of
approximately $25.9 billion of collateral previously posted by
AIGFP to CDS counterparties in respect of the terminated CDS and
AIG’s equity investment in ML III of $5 billion.”
Dec. 21, 2008: AIG sends a draft of its regulatory filing
detailing the purchase of additional CDOs to New York Fed
lawyers. “Counterparties received 100 percent of the par value
of the Multi-Sector CDOs sold and the related CDS have been
terminated,” the draft says.
Dec. 23, 2008: The New York Fed sends AIG a marked-up version of
the filing draft, crossing out the explanation of AIG paying 100
The New York Fed also crosses out a reference to an
amendment of the company’s shortfall agreement and asks if
including the amendment is “necessary or helpful?”
Dec. 24, 2008: AIG submits filing saying it retired another $16
billion in credit-default swaps after buying the underlying
securities through Maiden Lane III, bringing the total
collateralized debt obligations purchased to about $62 billion.
The filing omits the sentence that said “counterparties
received 100 percent.”
The filing has the amendment to the shortfall agreement,
which mentions Schedule A without including it.
Dec. 30, 2008: The SEC writes a letter to then-Chief Executive
officer Edward Liddy telling AIG to provide a Schedule A for the
shortfall agreement in its Dec. 24 and Dec. 2 filings. “You are
required to file the entire agreement, including all exhibits,
schedules, appendices and any document which is incorporated in
the agreement,” the SEC’s letter says.
Jan. 13, 2009: Peter Bazos, an outside lawyer for the New York
Fed, writes to AIG in an e-mail, asking the company to “Please
omit/redact the column headings included in the Schedule” in an
amendment of the Dec. 24, 2008, filing.
Diego Rotsztain, then an outside lawyer for the New York
Fed, writes the company an e-mail saying “AIG should be getting
a call from the SEC to discuss the special procedures to be
followed in connection with the submission of the confidential-
Jan. 14, 2009: Anthony Greco, an outside lawyer representing
AIG, writes to Bazos and asks, “We will defer to you on this,
but could you please provide us the basis for the headings being
confidential? The letter appears to be directed towards the
information contained in the columns as opposed to the headings
AIG files an amendment to the accord. In the page available
to the public with the headline “Schedule A to Shortfall
Agreement,” the insurer excludes the table listing banks,
writedowns and collateral postings.
“The confidential portion of this Schedule A has been
omitted and filed separately with the Securities and Exchange
Commission,” AIG says in the filing. “Confidential Treatment
has been requested for the omitted portions.”
Jan. 27, 2009: Geithner is sworn in as Treasury secretary and
will be replaced at the New York Fed by William Dudley.
March 5, 2009: Senators including Christopher Dodd, a
Connecticut Democrat, tell Federal Reserve Vice Chairman Donald
Kohn that the regulator should reveal the banks that bought
credit-default swaps from AIG.
“We need AIG to be stable and to continue in a stable
condition,” Kohn tells a Senate panel. “And I would be very
concerned that if we gave out the names of counterparties here,
people wouldn’t want to be doing business with AIG.”
March 12, 2009: Kathleen Shannon, an AIG deputy general counsel,
writes to the insurer’s executives in an e-mail about the
conflicting pressures from the New York Fed and SEC regarding
amendments to the filings. She says she believes the New York
Fed doesn’t want the insurer to include names of the tranches of
the securities tied to the swaps or their Committee on Uniform
Securities Identification Procedures numbers, or CUSIPs.
“In order to make only the disclosure that the Fed wants
us to make,” Shannon writes, “we need to have a reasonable
basis for believing and arguing to the SEC that the information
we are seeking to protect is not already publicly available.”
AIG’s then-General Counsel Anastasia Kelly e-mails the New
York Fed a draft of a letter to the SEC saying that the insurer
intends to withdraw its request for confidential treatment
because some of the information had been reported by the media.
March 13, 2009: New York Fed lawyer James Bergin writes an e-
mail to the New York Fed and AIG executives that he wants to set
up a 2 p.m. conference call with the insurer and the SEC. “AIG
is still confirming their comfort with certain of the redactions
we’d like made on the 8-K schedule,” Bergin writes.
Bergin writes in a separate e-mail that “I’d suggest also
we have a call among AIG and FRBNY prior to the 2 p.m. so that
we have our ducks in a row.”
March 15, 2009: AIG, under pressure from regulators, releases a
statement that discloses the names of its counterparties, which
includes banks such as Goldman Sachs and Deutsche Bank AG. The
counterparties received about $50 billion in forfeited
collateral postings and Maiden Lane III payments since the Sept.
16, 2008, rescue, the statement says. The statement lists a sum
of payments to each bank. It doesn’t identify the securities
tied to the swaps or list the value of individual purchases by
March 16, 2009: AIG amends its Dec. 2 and Dec. 24 filings to
include a list of derivative transactions and the insurer’s
counterparties. The updated Dec. 2 filing includes a Schedule A
that lists the names of counterparties on about 165 contracts,
while the amended Dec. 24 filing includes about 180 contracts.
AIG redacts the notional value of the trades, market declines,
collateral posted, tranche names and CUSIPs. Each of the
Schedule A documents includes the word “redacted” more than
April 28, 2009: New York Fed posts a portfolio breakdown for
Maiden Lane III on its Web site. The summary includes the value
of assets that are tied to residential- and commercial-mortgage-
backed securities and credit ratings for the holdings.
May 15, 2009: AIG amends its Dec. 2 and Dec. 24 filings to
include the lists of collateral postings and mark-to-market
losses on derivatives contracts. The amended Dec. 24 filing also
includes the CUSIPs, tranche names and notional amounts for 10
contracts. The word “redacted” appears more than 400 times in
May 22, 2009: AIG may withhold the redacted information from
Schedule A until Nov. 25, 2018, a decade after the date when
Maiden Lane began purchasing assets, the SEC says.
The information “qualifies as confidential commercial or
financial information under the Freedom of Information Act,”
based on statements from AIG, the SEC says in a letter.
Nov. 17, 2009: Neil Barofsky, the special inspector general
charged with policing the Troubled Asset Relief Program, says
disclosure of swaps details didn’t bring on the “dire
consequences” that Kohn said could accompany its release.
“Notwithstanding the Federal Reserve’s warnings, the sky
did not fall; there is no indication that AIG’s disclosure
undermined the stability of AIG or the market,” Barofsky wrote
in a report. “The default position, whenever government funds
are deployed in a crisis to support markets or institutions,
should be that the public is entitled to know what is being done
with government funds.”
Jan. 7, 2010: Bloomberg reports that e-mails obtained by
Representative Darrell Issa show the New York Fed pressed AIG to
withhold details from the public about the insurer’s payments to
Jan. 8, 2010: Thomas Baxter, general counsel of the New York
Fed, writes to lawmakers saying efforts to limit AIG’s
disclosure “did not warrant” Geithner’s attention.
Jan. 13, 2010: Edolphus Towns, the New York Democrat who is
chairman of the oversight committee, subpoenas Geithner’s e-
mails, phone logs and meeting notes tied to the bailout of AIG.
Jan. 19, 2010: The New York Fed produces more than 250,000 pages
of documents in response to the House subpoena. The regulator
says that it “assisted AIG in ensuring the accuracy of its
disclosures and protected important U.S. taxpayer interests.”
AIG was responsible for its disclosures, and the New York Fed
asked AIG to remove a reference to the bank payments because it
wasn’t “precisely accurate,” the regulator says in a statement.