Can You Spell "Chutzpah"? It Seems AIG Can.

Have you seen the new AIG (American International Group) advertisements that say, "Thank you America"?

The ads started running New Year's Day, shortly after the government sold off its final stake in the company (with a nice little $22 billion profit for us taxpayers). Back in 2008, shortly after the collapse of Lehman Brothers, the near-failure of AIG was halted when the government stepped in (because no private sources would loan them anything). Eventually, the government ended up with a 92 percent stake in the company.

Slowly but surely, the company bought its way out, by selling off some divisions and holding several stock offerings. Along the way, it also proved itself to be stunningly tone-deaf (you may recall that in 2009, the company got upset when word leaked of the size of the bonuses it was planning to offer to the "best and the brightest" who had ... very nearly bankrupted the company in the first place).

So I was intrigued by the ads. Maybe they've finally learned a little humility, I thought.

As if.

Because today's news is the ultimate bite-the-hand-that-feeds-you story: the AIG board is considering joining a $25 billion shareholder lawsuit against the government. The suit was filed in 2011 by Maurice Greenberg, a former CEO of AIG (until 2005, when he was forced out over allegations of improper business dealings). Mr. Greenberg is still a major investor in AIG.

According to a story in today's New York Times by Ben Protess and Michael J. de la Merced, the lawsuit

contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation."

I think this is the dictionary definition of chutzpah.

At the time, the alternative for AIG was bankruptcy. Which I think would have been a lot harder on the shareholders.

Newly-minted Massachusetts Senator (and member of the banking committee) Elizabeth Warren had this to say:

Beginning in 2008, the federal government poured billions of dollars into AIG to save it from bankruptcy. AIG’s reckless bets nearly crashed our entire economy. Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn’t generous enough. Even today, the government provides an ongoing, stealth bailout, propping up AIG with special tax breaks—tax breaks that Congress should stop. AIG should thank American taxpayers for their help, not bite the hand that fed them for helping them out in a crisis.

(Complete story at Business Insider, here)

I'm with Elizabeth on this one.