Leave your feedback Share Copy URL https://www.pbs.org/newshour/show/new-aig-ceo-discusses-company-spending-troubles Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Transcript Government-appointed AIG CEO Edward Liddy discusses how the financial sector shake-up led to insurer AIG's problems and what measures he intends to take in order to return to successful business strategy. Read the Full Transcript Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors. RAY SUAREZ: Of all the companies rescued by the government and the taxpayer in recent weeks, none has received a bigger guarantee than the insurance giant AIG. In the last month, the Federal Reserve provided the company with more than $120 billion so that it can survive and deal with a dwindling supply of cash.There have been numerous questions about the way AIG ran its business before and since the financial meltdown.American International Group is not only the largest U.S. insurance company; its businesses range from aircraft leasing to retirement plan management. HEIDI MOORE, The Wall Street Journal: Their balance sheet, which means their assets, are about $1.04 trillion. They do business with almost every other financial institution in the United States, and they help insure the debt on those financial institutions. RAY SUAREZ: It was the housing crisis and AIG's staggering mortgage-related losses that led to the government's enormous rescue.The company was also heavily vested in so-called credit default swaps. The swaps are traded in an unregulated market valued at more than $50 trillion.They are, in effect, a form of insurance against bond defaults. But as they became a more prominent financial instrument, bought and sold many times over, AIG suddenly was unable to cover billions in potential swap insurance when the market collapsed.That point was driven home at a congressional hearing earlier this month. Martin Sullivan was the president and CEO of AIG until June.REP. CAROLYN MALONEY (D), New York: There was no capital reserve behind the swaps, right? MARTIN SULLIVAN, Former CEO, American International Group: Right, that's… REP. CAROLYN MALONEY: So you were just gambling billions, possibly trillions of dollars? MARTIN SULLIVAN: Well, I wouldn't refer to it as gambling. I would — you know, these transactions were individually underwritten very carefully. And maybe I can provide some more background to you that may be helpful. REP. CAROLYN MALONEY: If they're very — if they were carefully underwritten, how come no one wants to buy them? RAY SUAREZ: At that same hearing, it was revealed the company treated its staff lavishly to spa retreats in California and a hunting trip in England costing over $500,000.REP. HENRY WAXMAN (D), California: The federal bailout occurred on September 16th. Less than one week later, AIG held a week-long retreat for company executives at the exclusive St. Regis Resort in Monarch Beach, California.Rooms at this resort can cost over $1,000 per night. Invoices provided to the committee show that AIG paid the resort over $440,000, including nearly $200,000 for rooms, over $150,000 for meals, and $23,000 in spa charges. RAY SUAREZ: In a letter, AIG said the event was mischaracterized in the hearing. It's since cancelled 160 conferences and meetings that were to cost $80 million.