CEO Liddy: No More Bailouts Needed For AIG

May 12, 2009— -- AIG , the recipient of approximately $170 billion in taxpayer bailout money, will not need more government aid, CEO Ed Liddy plans to tell Congress.

"We are stabilizing AIG's liquidity so that we do not need support beyond those amounts that the government has already authorized," Liddy states, according to prepared testimony for Wednesday morning's hearing before the House Oversight & Government Reform Committee. "Although as I have said before the state of the economy will be a factor."

The optimistic forecast is just one of four areas in which Liddy touts "substantial progress" made as part of the company's ongoing restructuring.

"We have reduced, but not yet eliminated, the systemic risk that AIG presents to the global system," he says. "We are selling assets and businesses, despite adverse conditions in global financial markets."

"We are restructuring some businesses for public offerings, for later disposition, or to be wound down so that future losses can be mitigated or avoided," he states.

Liddy notes that the company continues to wind down the complex derivatives portfolio at the Financial Products unit, which almost single-handedly drove the company into the ground with risky credit-default swaps. The exposure has now dropped from $2.7 trillion to $1.5 trillion.

When the CEO first testified before the House panel on March 18, lawmakers grilled him for over five hours about the company's controversial payment of $165 million in employee retention payments earlier that month. Before taking the witness stand again on Wednesday, Liddy reminds lawmakers of the government's massive stake in AIG.

"It is critical that we not lose sight of the fact that we are partners," he says. "When the employees of AIG make mistakes, we expect to be criticized. But rampant, unwarranted criticism of AIG serves only to diminish the value of our businesses around the world - to the detriment of our shareholders, including taxpayers, who own some 80 percent of AIG."

"Our plan is explicitly designed to avoid having to divest AIG assets at fire-sale prices," notes Liddy. "In fact, just the opposite is true. We intend for taxpayers to realize the fullest possible value from every asset disposition."