NU Online News Service, April 15, 4:15 p.m. EDT
WASHINGTON–A House committee is demanding information on whether American International Group used government money to hire outside public relations help to wage campaigns against critics of the government bailout of AIG.
Rep. Edolphus Towns, D-N.Y., chairman of the House Committee on Oversight and Government Reform, sent a letter to AIG yesterday demanding detailed data on whether public funds were used to conduct the campaign.
The letter came after the committee received information that outside public relations firms were being used by AIG to discount the criticism of Maurice "Hank" Greenberg, who was forced out as AIG chairman and chief executive officer and has been attacking AIG management ever since.
The letter arrived prior to a hearing by Mr. Towns' committee concerning facts surrounding AIG's troubled financial situation at which Mr. Greenberg testified.
Mr. Towns' request letter was addressed to current AIG Chairman and CEO Edward Liddy. It demanded copies of any contracts between AIG and two public relations firms, Burston-Marsteller and Hill & Knowlton.
It specifically asked whether a paper titled "The Greenberg Legacy" was "authored and circulated by, or at the behest of, AIG."
During his April 2 committee hearing appearance Mr. Greenberg heavily criticized the government's decision to pay off the counterparties to AIG's derivatives and credit default transactions. He said contracts would have allowed the firm to simply post collateral.
The letter said Rep. Towns "would be extremely disappointed to learn that any of the billions of taxpayer dollars invested to support AIG may have been diverted to finance a public relations campaign against critics of the AIG bailout."
"In my view, these allegations warrant further inquiry to ensure that federal funds are not being misused," Rep. Towns said.
He is asking that the information and records requested in the letter, "which will aid in the committee's ongoing investigation into the federal bailout," be delivered no later than April 28.
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