Washington is a strange city. You’re confronted with billboards for things normal humans can’t buy, like fighter jets. Small groups of lobbyists cluster in corners of office buildings and swap inside information in hushed tones. And there are the invites. Loads upon loads of invites to seminars and open-bar events and celebrations, all for obscure reasons. Washington trades on these invites. While at a glance they can seem confusing or meaningless, they typically have an ulterior motive. You can build a story around the real and sometimes insidious reasons for the gathering. The Prospect gets a lot of these emails, and each week, we’re going to share one of them with you, and take you inside what might be going on behind the scenes.
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If there’s ever a company that doesn’t deserve to have its centennial marked, especially not by a formal event inside the House Ways and Means Committee hearing room, it’s AIG, the lumbering insurance giant that played a primary role in submarining the economy in 2008. Joseph Cassano, a Michael Milken protégé, decided to place a munitions factory called AIG Financial Products inside this stodgy firm. Cassano’s brainchild handed out “naked” credit-default swaps, insurance against every garbage mortgage product invented during the housing bubble, without accumulating any capital to offset potential payoffs. He was long on the housing market well after everyone else went short.
Collecting insurance premiums without reserves is extremely lucrative, right up until the moment everyone loses and goes back to cash in their claims. The end came $182 billion later, an astonishing bailout that got funneled right into the pockets of the nation’s biggest banks, the “counter-parties” who didn’t have to take even a dollar of a discount. None of this stopped AIG executives from sucking up $450 million in bonuses after the bailout money arrived. In a real way, the incompetence and greed at AIG fueled the Great Recession, costing millions of people their jobs and homes.
Sounds like cause for a celebration! The invite, complete with a timeline of AIG’s history that conveniently skips from 2001 to 2015 with nothing from the housing bubble years mentioned, promises a rousing tribute to the company’s first 100 years. Special “Centennial Smash” cocktails were served. The chair of the House Ways and Means Committee, Richie Neal, “presided” over the event. And at least six other Republican and Democratic members attended, according to Politico. One of them, Brad Sherman (D-CA), thanked AIG for the jobs it has brought to his district, and made a joke about AIG not being “systemically important,” a reference to a designation requiring enhanced regulatory scrutiny that AIG wiggled out of in 2017.
Not only were AIG CEO Brian Duperreault, several company executives, and administration and foreign embassy officials on hand, a spy walking by the meeting room noticed a full gospel choir singing “Lean On Me.” Because when you think of a rock-solid friend who will “help you carry on” in times of trouble, you think AIG. The a cappella choir closed with Pharrell Williams’s “Happy.”
The general public is not the intended audience for this made-for-Congress event. AIG wanted members and their staffs to show up to throw down some drinks and hear some propaganda about their company, in the hopes that would weigh on them the next time they devise rules for the insurance industry. In fact, AIG has lobbied the Ways and Means committee on the SECURE Act, a top priority of Richie Neal, which would facilitate the presence of lucrative, high-cost annuities in 401(k) plans. This has long been a wish for insurance companies.
That Neal would actively participate is embarrassing for someone in a contested primary who might for once in his career need to project an image of caring about working people rather than corporate benefactors. But he’s long shown who he works in Congress for.
Do you have a ridiculous D.C. invite you want to share? Email us at DCinvites@prospect.org
