House panel grills ex-AIG execs

NEW YORK (CNNMoney.com) - Former chiefs of American International Group Inc. were blamed Tuesday for the insurer's financial crisis by a House committee chairman, while the ex-CEOs themselves cited accounting rules for the problems that led to the federal government's $85 billion bailout.

In prepared testimony for a committee hearing, ex-CEOs Robert Willumstad and Martin Sullivan said the accounting rules forced AIG to take billions in writedowns, initiating a downward spiral that led to the government action.

But Rep. Henry Waxman, D-California, chairman of the House Committee on Oversight and Government, put the blame for AIG's troubles squarely on its past and present leaders, comparing them to the former Lehman chief executive Richard Fuld, who testified on Monday about the investment bank's bankruptcy.

"In each case, the companies and their executives grew rich by taking on excessive risk," Waxman said. "In each case, the companies collapsed when these risks turned bad. And in each case, their executives are walking away with millions of dollars while taxpayers are stuck with billions of dollars in costs."
–From CNNMoney.com's Aaron Smith