Trial Sheds New Light on Goldman Sachs Ties to AIG CEO Edward Liddy
Finally, testimony during the trial shed new light on how Edward Liddy became A.I.G.’s chief executive under the bailout.
.. It was well known before the trial that Henry M. Paulson Jr., a former chief executive at Goldman who was the Treasury secretary at the time, was instrumental in hiring Mr. Liddy for the A.I.G. post. But the extensive involvement by other current and former Goldman executives in his selection was not.
This involvement was remarkable: Goldman, after all, was one of A.I.G.’s largest trading partners and one of the biggest beneficiaries of the insurer’s bailout. Goldman received $13 billion when the New York Fed, under Timothy F. Geithner, paid A.I.G.’s trading partners in full on credit insurance they had bought from it.
According to Mr. Liddy’s testimony, Chris Cole, co-chairman of Goldman’s investment banking unit, was the first to contact him about the A.I.G. job. Mr. Cole was working on a private-sector rescue of A.I.G. and called Mr. Liddy the morning of Sept. 16, 2008.
Later that day, testimony shows, Ken Wilson, Goldman’s former vice chairman and an adviser to Mr. Paulson at the Treasury, repeated the offer to Mr. Liddy. He accepted it. Mr. Paulson then telephoned Mr. Liddy around 3 p.m. to discuss the matter.