AIG POLITICAL CONTRIBUTIONS

March 8, 2004

AIG, Citigroup Battle Unions on Political Donation Disclosure

http://www.bloomberg.com/apps/news?pid=10000103&sid=arBbK7iUfgPM&refer=us

Merrill Backs Bush

Bush derives much of his campaign donations from executives at publicly traded companies, with employees at Merrill Lynch & Co., UBS AG and MBNA Corp. among those making up 13 of his top 20 donors last year, contributing $2.9 million.

Six of the top 20 donors to Senator John Kerry, who has clinched the Democratic Party's presidential nomination, were employees of listed companies, and they gave $275,000 since he began campaigning in January 2003, according to the Center for Responsive Politics.

The shareholder resolutions were filed in December and January by the Service Employees International Union and other affiliates of the AFL-CIO, a federation of 64 unions representing 13 million people. They seek annual reports about corporate donations and ``an accounting of the company's resources, including property and personnel, contributed or donated to'' political parties or candidates.

General Electric

Shareholder proposals included in proxy ballots seldom garner a majority of votes, though a high percentage of favorable returns can send a message to the board, said Sabato at the University of Virginia.

Many of the companies targeted by the proposal asked the SEC to let them exclude the information from their proxies on the grounds that political involvement is part of ordinary business. Warren, New Jersey-based Chubb Corp., which was denied its request to omit the proposal, said in letters to the SEC that the measure would constitute micro-management by shareholders.

``Providing detailed information regarding which members of management influence which decisions about political contributions extends deeply into the company's daily decision- making procedures,'' Chubb wrote.

The SEC denied a request by Wells Fargo & Co. to omit the resolutions from its proxy. Wells Fargo, based in San Francisco, will post its policy on political contributions on its Web site in accordance with the unions' request, said spokeswoman Julia Tunis.

General Electric Co., whose chairman and chief executive officer, Jeffrey Immelt, 48, donated $2,000 to the Bush campaign, included the resolution in its proxy -- along with a recommendation to shareholders to vote against it.
``Because GE is committed to complying with applicable campaign finance laws, including all reporting requirements, we do not believe the report requested in this proposal is necessary,'' the Fairfield, Connecticut-based company said in its proxy.
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/18/AR2009031803201.html?wpisrc=newsletter

From 1987 to 2004, the company's financial products unit contributed more than $5 billion to AIG's pretax income. In spring 2005, after I left the company, AIG's credit rating was downgraded. It would have been logical for AIG's new management to end or reduce its business of writing credit default swaps because of the risk it faced of having to post billions of dollars in additional collateral in connection with certain credit default protection. Yet AIG ramped up its credit default swaps business; significantly, the quality of the securities AIG wrote credit protection for deteriorated, and the company plunged into subprime mortgages. The results were disastrous.