Report on A House Resolution of Inquiry Concerning American International Group (AIG)

111th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 111-84
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DIRECTING THE SECRETARY OF THE TREASURY TO TRANSMIT TO THE HOUSE OF
REPRESENTATIVES ALL INFORMATION IN HIS POSSESSION RELATING TO SPECIFIC
COMMUNICATIONS WITH AMERICAN INTERNATIONAL GROUP, INC. (AIG)

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April 23, 2009.--Referred to the House Calendar and ordered to be
printed

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Mr. Frank of Massachusetts, from the Committee on Financial Services,
submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H. Res. 251]

The Committee on Financial Services, to whom was referred
the resolution (H. Res. 251) directing the Secretary of the
Treasury to transmit to the House of Representatives all
information in his possession relating to specific
communications with American International Group, Inc. (AIG),
having considered the same, report favorably thereon without
amendment and recommend that the resolution be agreed to.

CONTENTS

Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Committee Consideration.......................................... 2
Committee Votes.................................................. 2
Committee Oversight Findings..................................... 3
Performance Goals and Objectives................................. 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Federal Mandates Statement....................................... 4
Advisory Committee Statement..................................... 4
Applicability to Legislative Branch.............................. 4
Earmark Identification........................................... 4
Section-by-Section Analysis of the Legislation................... 4
Additional Views................................................. 5

PURPOSE AND SUMMARY

H. Res. 251, directs the Secretary of the Treasury to
transmit to the House, within fourteen days of adoption, all
information in his possession referring or relating to: (i) any
negotiation concerning the controlled break-up of the American
International Group, Inc. (AIG); (ii) any negotiation
concerning any additional assistance under title I of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et
seq.) or other program administered by the Secretary to AIG; or
(iii) any Government communication or authorization for payment
of any pre-existing bonus contract with any executive of AIG.

BACKGROUND AND NEED FOR LEGISLATION

H. Res. 251 is a resolution of inquiry which, pursuant to
clause 7 of rule XIII of the Rules of the House of
Representatives, directs the Committee to act on the resolution
within 14 legislative days or a privileged motion to discharge
the Committee is in order.
Under the Rules and precedents of the House, a resolution
of inquiry is one of the methods used by the House to obtain
information from the executive branch. According to volume 7,
chapter 24, section 8 of Deschler's Procedure, it is a ``simple
resolution making a direct request or demand of the President
or the head of an executive department to furnish the House of
Representatives with specific factual information in the
possession of the executive branch.''

HEARINGS

The Committee has held no hearings on H. Res. 251 itself.
However, the Subcommittee on Capital Markets, Insurance, and
Government Sponsored Enterprises held a hearing on March 18,
2009, entitled ``American International Group's Impact on the
Global Economy: Before, During and After Federal
Intervention.'' The following witnesses testified: Mr. Scott
Polakoff, Acting Director, Office of Thrift Supervision; the
Honorable Joel Ario, Insurance Commissioner, Pennsylvania
Insurance Department, on behalf of the National Association of
Insurance Commissioners; Ms. Orice M. Williams, Director,
Financial Markets and Community Investment, Government
Accountability Office; Mr. Rodney Clark, Managing Director,
Insurance Ratings, Standard & Poor's; and Mr. Edward M. Liddy,
Chairman and Chief Executive Officer, American International
Group.
Also, the Committee on Financial Services held a hearing on
March 24, 2009, entitled ``Oversight of the Federal
Government's Intervention at American International Group.''
The following witnesses testified: The Honorable Timothy F.
Geithner, Secretary of the Treasury; The Honorable Ben S.
Bernanke, Chairman, Board of Governors of the Federal Reserve
System; and Mr. William C. Dudley, President and Chief
Executive Officer, Federal Reserve Bank of New York.

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on
March 25, 2009, and on March 26, 2009, ordered H. Res. 251
reported to the House with a favorable recommendation.

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Frank to report the resolution to the House with
a favorable recommendation was agreed to by a record vote of 64
yeas and 0 nays (Record vote No. FC-10). The names of Members
voting for and against follow:

RECORD VOTE NO. FC-10
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank........................ X ....... ........ Mr. Bachus......... X ....... ........
Mr. Kanjorski.................... X ....... ........ Mr. Castle......... ........ ....... ........
Ms. Waters....................... ........ ....... ........ Mr. King (NY)...... X ....... ........
Mrs. Maloney..................... X ....... ........ Mr. Royce.......... X ....... ........
Mr. Gutierrez.................... X ....... ........ Mr. Lucas.......... X ....... ........
Ms. Velazquez.................... X ....... ........ Mr. Paul........... X ....... ........
Mr. Watt......................... X ....... ........ Mr. Manzullo....... X ....... ........
Mr. Ackerman..................... X ....... ........ Mr. Jones.......... X ....... ........
Mr. Sherman...................... X ....... ........ Mrs. Biggert....... X ....... ........
Mr. Meeks........................ X ....... ........ Mr. Miller (CA).... ........ ....... ........
Mr. Moore (KS)................... X ....... ........ Mrs. Capito........ X ....... ........
Mr. Capuano...................... X ....... ........ Mr. Hensarling..... X ....... ........
Mr. Hinojosa..................... ........ ....... ........ Mr. Garrett (NJ)... X ....... ........
Mr. Clay......................... ........ ....... ........ Mr. Barrett (SC)... X ....... ........
Mrs. McCarthy.................... X ....... ........ Mr. Gerlach........ X ....... ........
Mr. Baca......................... X ....... ........ Mr. Neugebauer..... X ....... ........
Mr. Lynch........................ X ....... ........ Mr. Price (GA)..... X ....... ........
Mr. Miller (NC).................. X ....... ........ Mr. McHenry........ X ....... ........
Mr. Scott........................ X ....... ........ Mr. Campbell....... X ....... ........
Mr. Green........................ X ....... ........ Mr. Putnam......... X ....... ........
Mr. Cleaver...................... X ....... ........ Mrs. Bachmann...... X ....... ........
Ms. Bean......................... X ....... ........ Mr. Marchant....... X ....... ........
Ms. Moore (WI)................... X ....... ........ Mr. McCotter....... X ....... ........
Mr. Hodes........................ X ....... ........ Mr. McCarthy....... X ....... ........
Mr. Ellison...................... X ....... ........ Mr. Posey.......... X ....... ........
Mr. Klein........................ X ....... ........ Ms. Jenkins........ X ....... ........
Mr. Wilson....................... X ....... ........ Mr. Lee............ X ....... ........
Mr. Perlmutter................... X ....... ........ Mr. Paulsen........ ........ ....... ........
Mr. Donnelly..................... X ....... ........ Mr. Lance.......... X ....... ........
Mr. Foster....................... X ....... ........
Mr. Carson....................... X ....... ........
Mr. Speier....................... X ....... ........
Mr. Childers..................... X ....... ........
Mr. Minnick...................... X ....... ........
Mr. Adler........................ X ....... ........
Ms. Kilroy....................... X ....... ........
Mr. Driehaus..................... X ....... ........
Ms. Kosmas....................... ........ ....... ........
Mr. Grayson...................... X ....... ........
Mr. Himes........................ X ....... ........
Mr. Peters....................... X ....... ........
Mr. Maffei....................... X ....... ........
----------------------------------------------------------------------------------------------------------------

No amendments were considered during the consideration of
the resolution.

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee made findings and
recommendations of the Committee, based on oversight activities
under clause 2(b)(1) of rule X of the Rules of the House of
Representatives, are incorporated into the descriptive portions
of this report.

PERFORMANCE GOALS AND OBJECTIVES

Consistent with clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H. Res. 251 is intended to direct the Secretary of the
Treasury to produce materials related to federal intervention
at AIG in order to assist the Committee in its oversight
capacity.

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that this
legislation would result in no new budget authority,
entitlement authority, or tax expenditures or revenues.

FEDERAL MANDATES STATEMENT

H. Res. 251 contains no unfunded mandates.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

EARMARK IDENTIFICATION

H. Res. 251 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

H. Res. 251 directs the Secretary of the Treasury to
transmit to the House, within fourteen days of adoption, all
information in his possession referring or relating to: (i) any
negotiation concerning the controlled break-up of the American
International Group, Inc. (AIG); (ii) any negotiation
concerning any additional assistance under title I of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et
seq.) or other program administered by the Secretary to AIG; or
(iii) any Government communication or authorization for payment
of any pre-existing bonus contract with any executive of the
AIG.

ADDITIONAL VIEWS

Committee Republicans are unanimous in their support of H.
Res. 251, a Resolution of Inquiry introduced by Representatives
LaTourette (OH) and McCotter (MI), which directs the Treasury
Secretary to provide the House of Representatives all
information relating to the government's interaction with
American International Group (AIG), and its bonuses, within 14
days.
Like hard-working American families, Committee Republicans
are extremely disappointed by the recent bonuses going to
institutions that have received massive government bailouts,
and have been advocating against releasing further taxpayer
dollars without commonsense taxpayer protections and
safeguards.
While Committee Republicans were pleased that the Majority
joined with us in unanimously supporting this important
resolution, we are concerned that the Majority's report focuses
too narrowly on the legislative text, rather than fully
evaluating the sequence of events that led to the AIG bonuses.
The Majority fails to ask the important questions that every
American taxpayer deserves to have answered.
Most Committee Republicans agreed with President Obama's
action, instructing Treasury to block the AIG bonuses from
going to some of the same people who helped create this
financial crisis, even though days earlier, his top economic
advisor, Larry Summers, announced that there was nothing the
Administration could do.
We have learned that the Administration worked to add a
provision to the so-called stimulus legislation that ensured
these bonuses would be paid. Specifically, a bipartisan
amendment written by Senators Olympia Snowe (ME) and Ron Wyden
(OR) that would have forced AIG to pay nearly $58 million in
taxes on top executive bonuses was stripped from the
legislation before the stimulus conference report was brought
to the Senate floor. In its place, an amendment by Senator Dodd
(CT) was inserted, which exempted ``contractually obligated
bonuses agreed to on or before February 11, 2009'' from the
executive compensation restrictions contained in the bill. This
amendment specifically allowed the bonuses for AIG executives.
We recommend that important questions, inherent to this
resolution, are answered, including: How did this happen? Who
called for and wrote the provision into the stimulus, and why?
Who in the Administration authorized Treasury officials to
approach Senator Dodd about including the AIG bonus-enabling
provision? And who were the individuals who made these far-
reaching decisions? These are all questions that American
taxpayers deserve to have answered.
We also believe that it is imperative that the Treasury
clarify what top officials knew about the AIG bonuses and when
they knew it. Recently, Secretary Geithner reiterated that he
first learned of these bonuses on March 10, 2009. However,
there is video confirming that these bonuses were raised to him
before the Ways and Means Committee on March 3, 2009. While the
Federal Reserve acknowledged they were told last fall and that
the bonuses were listed in AIG's 3rd quarter SEC filing last
year, the public has yet to receive a straight answer from
Treasury as to when they first learned of these bonuses.
We thank every member of the Committee for supporting this
resolution of inquiry. This commonsense resolution directs
Treasury to provide Congress all information related to the
AIG's break up, the need for the fourth bailout of the company,
and all communications related to the payment of the bonuses
within 14 days. American taxpayers have been forced to commit
$170 billion in their hard-earned monies to support AIG.
Anything less than securing answers and explanations to all of
these questions would be unacceptable.

Spencer Bachus.
Scott Garrett.
Kenny Marchant.
Randy Neugebauer.
Michael N. Castle.
Bill Posey.
Judy Biggert.
Ed Royce.
Donald Manzullo.
Michele Bachmann.
Thaddeus McCotter.
Ron Paul.