Oct. 6, 2014. Today’s New York Times reports that Former Treasury Secretary Henry Paulson testified that the terms imposed on AIG by the feds as part of its bailout were indeed punitive in order to discourage opposition.
Mr. Paulson testified on Monday that he believed the terms of A.I.G.’s bailout in September 2008 were “punitive” and “harsher” compared with the assistance that other financial institutions received at the time. He said that political considerations played into the decision to apply “punitive” terms to A.I.G.: It had become a lightning rod for public outrage that needed to be dealt with.
When asked by Mr. Boies if it was important for the government bailout of A.I.G. to be seen as harsh to quell political opposition, Mr. Paulson said it was.
Go to http://dealbook.nytimes.com/2014/10/06/paulson-takes-the-stand-in-a-i-g-trial/?ref=business
And so, it would appear that AIG’s contention that it had been singled out for more harsh treatment than the other beneficiaries of government bailouts, is justified. Whether that justification will be deemed by the court to be sufficient as a defense for the feds’ punitive behavior, is another question.
Stay tuned.