American International Group Inc. bowed to increasing pressure in Congress on Sunday and disclosed the names of dozens of banks and other institutions that benefited from the first chunk of $180 billion in bailout funds it received.
The concession came as public officials expressed outrage at the giant insurer's decision to pay $165 million in bonuses to key employees.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," Lawrence H. Summers, Obama's top economic advisor, said on CBS' "Face the Nation."
AIG and the Federal Reserve have been pressured for months by some members of Congress to reveal the names of the banks and other institutions that were paid after the company -- teetering on the brink of failure because of plummeting investments -- received an $85-billion loan from the Fed in September.
AIG's downward spiral was accelerated by losses related to its huge business of insuring high-risk mortgage securities against default, via complex agreements known as credit default swaps. As the housing meltdown worsened last year, AIG's guarantees, which the company had sold to major banks and brokerages in the U.S. and abroad, came back to haunt it.
The federal rescue of the insurer has since doubled in size, and U.S. taxpayers now own 80% of the company.
The company said it shelled out nearly $100 billion in the final few months of the year to satisfy some of the contracts it had outstanding under credit default swaps and other insurance and investment agreements.
The beneficiaries included major foreign banks such as Germany's Deutsche Bank and France's Societe Generale, as well as U.S. titans Goldman Sachs Group and Merrill Lynch & Co.
U.S. municipalities, including some in California, also benefited as AIG settled up payments due under guaranteed investment agreements, under which states, cities and other municipalities temporarily park funds raised from bond sales. California entities received a total of about $1 billion.
The potential for an AIG collapse to bring down other financial giants worldwide, because of what the insurer owed other institutions, was the major justification the government cited for the massive bailout. But until now, taxpayers haven't been told which institutions ultimately were on the receiving end of the money funneled to AIG.
