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AIG Spa Trip Fuels Fury on Hill
"Looking back on my time as CEO, I don't believe AIG could have done anything differently," Willumstad said.
Sullivan blamed "a global financial tsunami" and the "mark-to-market" accounting rules, which require businesses to value assets at market value, even if no sale is imminent.
"I have spent my entire adult life in service to AIG, and I am heartbroken at what has happened," he told the committee.
The committee members, barely concealing their frustration, seemed stunned by the duo's refusal to find fault with their own performances.
"Don't you think the management has some responsibility for what went on there?" Rep. John F. Tierney (D-Mass.) said at one point, his voice incredulous.
Sullivan responded that when they learned there was trouble with their investments, they put controls in place.
Tierney then questioned whether, at their compensation levels, the manager should have been "ahead of the curve" on such troubles.
"This is a fundamental failure of management," Tierney said, exasperated.
The executives sat stone faced.
The House committee, which took on executive compensation at bankrupt Wall Street firm Lehman Brothers on Monday, has received "tens of thousands" of pages of documents from AIG, Waxman said.
Those documents show that AIG executives may have played a more significant role in the company's collapse than either of the two executives let on, Waxman said.
On Dec. 5, 2007, Sullivan told investors "we are confident in our marks and the reasonableness of our valuation methods."