Who Is Following TPMemo's Reporting On AIG's Possible Criminal Activity Circa 2007?

[KittyWampus]

Josh Marshall and his team are investigating AIG's Financial Division. What the top guys knew and what they told shareholders, regulators and accountants they called in to see books.

I'm just wondering cause a bunch of DU'ers seem to think AIG's bonuses are a "distraction".

In fact, AIG saying "fuck you" regarding bonuses has become the perfect opportunity to shine a light on the shady bastards. The idiots gave themselves even MORE negative coverage.

This is the perfect opportunity to start digging for info on what, if any, criminal activity was going on.

PLEASE READ THE FOLLOWING FROM TALKINGPOINTSMEMO IF YOU HAVEN"T ALREADY AND CHECK THEIR COVERAGE:

"In the post below, I referenced the statements of Joseph St. Denis, the former chief accountant at AIG Financial Products, who said that AIGFP President Joseph Cassano had barred him from efforts to value AIGFP's credit default swap portfolio because he feared St. Denis would "pollute the process." Remember, this is the accountant, who wants to review the books to see whether the accounting is right. And Cassano doesn't want him looking.

snip

Some of the discussion you probably need to be an accountant to fully absorb. But the basic outlines are clear. In June 2006, St. Denis was brought in to provide AIG corporate with a clearer window into the accounting practices at AIGFP and make sure they were operating under industry standard accounting protocols.

All was going well into the first rumblings of the credit crisis began in in 2007. At this point the valuations and the risks associated with AIGFP CDS portfolio began to move to the fore. And that basically led to a rapid deterioration of St. Denis's relationship with Cassano.

There's a lot that's very suggestive in that letter about where this is likely going.

Late Update: TPM Reader XX doesn't think it looks good for Mr. Cassano ...

I read the St Denis letter. I am no securities or derivatives expert, but I have worked on some pretty complex cases involving securities fraud and structured investment vehicles (which were miserable cases to work on, but that's neither here nor there). Suffice it to say that based on my experience, it sounds like Cassano has a lot to hide and a lot to be worried about. His behavior and outbursts are consistent with the actions of people and companies that I have reviewed in the past - and those cases ended very badly for the defendants, whether monetarily or criminally.

In the unlikely event that you post any of this to the site, I would ask that you not use my initials. Sensitive stuff, as you can imagine. "

[Beetwasher]

1. St. Denis Seems Like A Stand Up Guy

His letter may be a bit wonkish for some, but I highly recommend reading the whole ten pages.

TPM is doing great work on this.

For what it's worth, I'm not sure if our discussion in the other thread prompted this, but I certainly don't think this is a distraction at all. I think it's a highly necessary endeavor.

My point is regarding the motives of many in the media piling on this. I'm glad they are, but I think too much of the focus is being centered on how Obama may have fucked up (personally I think he probably did fuck up some on this issue, but I think he's trying to make good now) as opposed to the real story about the fraudulent activity that's being going on.

[KittyWampus]

2. he does indeed and may be sympathetic to requests from Congress for more information

[Beetwasher]

3. Actually, Marshall Says The Discussion About The Compensation Is A Distraction

From his latest post on the subject:

"Employment and compensation contracts aren't the issue here. That is a distraction. Think more in terms of RICO. Let us know more about the on-going criminal probe."

If they can sidetrack the conversation to be just about the compensation, then the real issue gets glossed over.

This goes back to my point about why the Traditional may be all over this aspect of the story and why you need to question their motives. They are focusing on that one aspect of this and not getting into the larger picture of the systemic fraudulent nature of these financial instruments and the deep criminal activity.

[kentuck]

4. That is exactly what is happening...

We should not be distracted.

[KittyWampus]

6. If the Bonus flap never happened, AIG wouldn't even be in the news at all at this point.

At least now there's more attention to them.

[KittyWampus]

5. my point, if the compensation wasn't being covered, AIG wouldn't be in the news at all

for anything.

At least with this, there is rising public interest.

In other words, it has become a hook into which more serious AIG malfeasance can be pulled into the spotlight.

[Beetwasher]

7. True, Hopefully Though It WILL Lead To Them Digging Deeper

Though I won't hold by breath for the Traditional Media to go beyond the outrage over the Bonus payments.

Thankfully, we don't need them anymore when we've got stellar talent like Marshall on the case!