AIG CEO Should Report Financial Ties, Cummings Says
May 26 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S., should require candidates for its top job to release the same personal financial data the government demands from senior officials, a congressman said.
Anyone under consideration to replace Chief Executive Officer Edward Liddy should disclose their stock holdings, employment history and other information needed for those seeking “a senior appointed position with a federal government agency,” said Representative Elijah Cummings in a letter to AIG’s incoming board of directors today.
Cummings was among members of Congress who said Liddy’s ownership of Goldman Sachs Group Inc. shares while running New York-based AIG created the appearance of a conflict of interest. Goldman Sachs received $12.9 billion from AIG after the insurer was rescued, including payments that settled credit-default swap contracts with the firm. AIG initially resisted calls from Congress to list banks that got the payments.
Liddy, who announced last week he would step down once a successor is appointed, said in an interview that the job of running the company and repaying a $182.5 billion bailout was complicated by “an awful lot of cooks in the kitchen.” Christina Pretto, a spokeswoman for the insurer, declined to comment today.
‘Misstatements, Deception’
Cummings, 58, a member of the House Oversight and Government Reform Committee, was among the first lawmakers last year to question AIG’s plans to pay $1 billion in retention bonuses. A firestorm of criticism about the payments prompted President Barack Obama to demand that some bonuses be blocked or recovered.
“Months of misstatements and deception have eroded the trust of Congress in AIG’s leadership to the point that the most basic constructs of corporate responsibility must be restated,” wrote Cummings, a Maryland Democrat. The next CEO should be “committed to maintaining an open and honest dialogue with the U.S. Congress,” he said.
Liddy,63, was appointed by the U.S. in September to the AIG post. He previously was CEO of Allstate Corp., the largest publicly traded U.S. home and auto insurer and had served on the board of Goldman Sachs. He agreed to a salary of $1.
The insurer should use Obama’s $400,000 salary as a model in setting compensation, Cummings said last week. Such a salary may limit the pool of qualified candidates, said pay consultants including Alan Johnson, managing director of Johnson Associates Inc.
Internal Candidates
The company has capable internal candidates and will also look outside, Liddy said in an interview last week. He proposed that the chairman and CEO jobs be split after he steps down.
The Ethics in Government Act requires appointees to senior federal jobs to disclose information including income, honoraria and capital gains; the value of securities and property; and job history and any agreements on future employment.
Cummings sent the letter to candidates who will stand for election to AIG’s board in June. The government’s majority stake will be voted by three trustees who helped pick the slate.
To contact the reporter on this story: Erik Holm in New York at eholm2@bloomberg.net.
Last Updated: May 26, 2009 12:18 EDT |
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