Tuesday, November 25, 2008

AIG Bail-Out May Threaten Civil Liberties

The recent $152 billion government bailout of American International Group (AIG) may have given the Central Intelligence Agency (CIA) access to the personal information of millions of people in America and all over the world. AIG, its subsidiaries, and its founder have a history of fraud allegations and collaborating covertly with the CIA in espionage and illegal arms smuggling.

AIG is the majority shareholder of Kroll Associates, which is one of several private companies, which the CIA employs to conduct espionage and illegal arms smuggling. Kroll was used to smuggle arms to the Contras in El Salvador as part of the Iran-Contra scandal during the Reagan administration. Kroll’s privatized status keeps it free from much of the congressional oversight that an official arm of the CIA would have to comply with. It is more difficult for Congress and the press to probe into Kroll’s potentially illegal activities. This would also be true of AIG.

AIG is America’s largest insurance provider. It also provides insurance internationally in 130 countries and jurisdictions. Insurance companies have access to more personal information on US citizens than almost any other entity in our society. They have access to our financial records, medical history, banking records, and much more. This puts into question whether the CIA may now be using AIG to conduct illegal espionage on American citizens in the name of the War on Terror.

It would not be the first time that the US government used insurance data to spy on those they considered dangerous or a threat. During World War II, the US government created the Insurance Intelligence Unit, a component of the Office of Strategic Services, a forerunner of the a forerunner of the CIA, and its elite counterintelligence branch X-2. This specialized intelligence group used international insurance data and information to gain knowledge of Germany’s economy and financial institutions, according Los Angeles Times article in 2000. The man who was in charge of the CIA’s secret insurance spying unit was Cornelius V. Starr, who later founded AIG.

In 1968 Starr chose Maurice Greenberg as his successor at AIG. In 2005 Greenberg was investigated by New York Attorney General Eliot Spitzer for securities fraud. The investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives. Although the criminal charges against Greenberg have been dropped after AIG settled the case, Spitzer has taken the case to civil proceedings where many of the major allegations are still part of the claim. Spitzer’s successor, Andrew Cuomo, is now running the investigation. Greenberg was eventually forced to resign as CEO of AIG.

Maurice is not the only Greenberg who has had to deal with allegations of illegal activity. In 2005, his son, Jeffrey W. Greenberg, was forced to resign as CEO of Marsh & McLennan, after the company’s insurance brokerage unit was charged with bid-rigging and accepting kickbacks, among other allegations.

AIG, its subsidiaries, and those that are connected to the company have a history and a reputation of operating outside of the law and sometimes on behalf of the CIA’s domestic and international agendas. As part of the bailout, the Federal Reserve now owns 79.9% of AIG. The company’s history is riddled with fraud allegations, criminal convictions, and ties with Kroll, nobody knows if favors were agreed upon behind closed doors in return for the government bailout.

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