Monday, December 29, 2008
This is the first of a three-part series on how AIG, one of the world's premier companies, became a fulcrum in the global economic crisis. AIG's impending collapse in September triggered the most costly bailout of a private company in U.S. history.
The series is a narrative account of the 21-year history of AIG Financial Products, which became a powerful current in the much larger flow of events that led to the crisis. Today's story deals with events from 1987 to 1998. Part two, appearing Tuesday, covers 1998 to 2005. On Wednesday, part three will report on 2005 through the present troubles.
The stories are based on internal records, public documents such as Securities and Exchange Commission filings, transcriptions of investor calls and conferences, and on-the-record interviews with current and former employees of AIG and its Financial Products unit, as well as government officials.
Descriptions of specific events come from the recollections of participants or transcripts. In some instances, Financial Products and AIG employees provided information or guidance, but did not want to quoted by name.
Those speaking on the record in today's report include, among others, Financial Products' founders, Howard Sosin and Randy Rackson, and Sosin's successor as president, Tom Savage. From AIG, on-the-record interviews were conducted with former chairman Maurice "Hank" Greenberg, former vice chairman Ed Matthews and former chief financial officer Howard Smith.