AIG Founder Wielded Personal Influence in Washington

"They relied on Washington clout rather than on sound financial oversight from a good board," Ferlauto said.

The company also lavished political contributions on candidates from both parties.

Greenberg himself was a major Republican donor, serving as a Pioneer and then a Ranger fundraiser for President Bush's two campaigns. AIG was also a top donor to Sen. John McCain's presidential run in 2000. At an insurance conference in Florida last spring, participants said, Greenberg told industry members that Republican nominee McCain was the best choice for the White House.

AIG executives and employees gave Democrats 46 percent of their campaign contributions since 1998. Sen. Christopher J. Dodd (Conn.), chairman of the Senate banking committee, racked up the most donations, $281,400, while Sen. Charles E. Schumer (N.Y.), a member of both the Senate banking and finance committees, took in $116,400 .

The connections worked well when AIG needed special help, as it did in the days before and after the Sept. 11, 2001, attacks.

Before the attacks, Greenberg had been working the phones to Washington and Geneva, consulting with U.S. Trade Representative Robert B. Zoellick's staff and the Chinese about how to ensure AIG could continue to open and control its own insurance branches in China. The country's entry into the World Trade Organization had been temporarily held up by a standoff between AIG's claim of special status and European Union objections. China formally joined the international trading group on Sept. 15, after U.S. negotiators won a concession allowing AIG to open more branches.

Ten days after the attacks, Greenberg led a group of insurance executives into a meeting with Schumer, where they pressed for taxpayers' money to cover terrorism-related losses. At the same session, Greenberg sought -- and later won -- Schumer's backing for a legislative amendment that provided war-risk insurance not just to airlines, but to companies such as AIG that leased planes to airlines. A Transportation Department lawyer inserted a handwritten amendment, covering leasing companies, into the war-risk bill shortly before its passage.

Greenberg also put his money into opposing regulation. The largest recipient of the $25 million his Starr Foundation gave to trade groups was a foundation with ties to the U.S. Chamber of Commerce, whose leaders publicly supported Greenberg when he and AIG were under investigation for alleged accounting fraud and bid-rigging by federal and New York authorities in the early 2000s.

The Starr Foundation also gave $500,000 to support a November 2006 report by the Committee on Capital Markets Regulation, its authors said. The report called for a widespread overhaul of financial rules, more rigorous oversight of the enforcement unit of the Securities and Exchange Commission and fewer criminal prosecutions of businesses.

Long after his ouster, Greenberg remained a person to call on for lawmakers needing help with pet projects. Rep. Charles B. Rangel (D-N.Y.), chairman of the House Ways and Means Committee, sought a donation from Greenberg for the new Charles B. Rangel Center for Public Service at the City College of New York. Eventually, the Starr Foundation donated $5 million to the center.

AIG also became a VIP donor to a McCain think tank, giving an amount "over $50,000" to the Reform Institute, a group McCain founded in 2001 to promote campaign fundraising reform.

Staff writers Christopher Lee and Carrie Johnson, staff researcher Julie Tate and database editor Sarah Cohen contributed to this report.