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AIG CEO Ed Liddy Faces Angry Congress

Aired March 18, 2009 - 15:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICK SANCHEZ, CNN ANCHOR: It has been unbelievable to watch. Hello again, everybody. I'm Rick Sanchez.

We will stay with the picture, just so you can see some of it yourself. These are congressmen that have all but berated -- some would possibly argue that they have even grandstanded in this case.

They have tried to humiliate this man, Ed Liddy, who is now at the helm of AIG, despite the fact that it's been repeated over and over again -- I know a lot of folks have been commenting to us. He's taking this job essentially without a salary, he says, for the good of the American people.

It's like being put at the helm -- and I think Gary Ackerman from New York said this. It's like being put at the helm of a ship that has already crashed into the shoals and somehow you're going to try to get all the cargo off.

It's a very difficult situation. It goes back to the point of what is going on with AIG. And we have got some guests who are going to be taking you through this.

But there's some sound we want you to hear. We don't know if you have been tuned in all day long. It has been remarkable to watch, even chilling at times. And there have been many pieces of information, pieces of this puzzle, actually, that have been missing all throughout the last 48 hours that we didn't know the answers to.

Well, we know the answers to those questions right now. They involve Congress. They involve AIG. They involve these traders with AIG. They involve the president of the United States. They involve the treasury secretary, Tim Geithner, as well.

And we're going to be taking through all of those.

Before we do anything else, there's something I want you to hear. This is Ed Liddy when he's speaking about the money, your money, the money that all America seems so upset about, these $165 million that are called retention bonuses for these traders.

For the first time, we found out if that money is going to be coming back to the American people. Here's what he had to say about it.

(BEGIN VIDEO CLIP)

EDWARD LIDDY, CEO, AMERICAN INTERNATIONAL GROUP: This morning, I have asked the employees of AIG Financial Products to step up and do the right thing. Specifically, I have asked those who received retention payments in excess of $100,000 or more to return at least half of those payments. Some have already stepped forward and offered to give up a hundred percent of their payments.

The action we are taking today is a result of discussions with numerous parties, many of you, including Attorney General Cuomo of New York.

(END VIDEO CLIP)

SANCHEZ: All right. I want to bring in Rick Newman from "U.S. News & World Report." He's going to be taking us through this conversation, as well as Bob Lenzner, our guru from Forbes.com.

Hey, there's another I want you guys to listen to, all right? And I want the folks at home to watch this as well. We have been hearing all this about these horrible traders wanting these retention bonuses.

There was a chilling moment when Mr. Liddy describes what's been going on with these guys, because everybody wants their names named. Who are they? I want to know who they are, how much they got and where they live. That's what a lot of these congressmen have been screaming for.

Here's the reason Liddy says he doesn't want their names put out there. Let's pick up that sound.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES COMMITTEE CHAIRMAN: I do ask that you submit those names without restriction. And if you feel unable to do that, then I will ask the committee to subpoena them.

LIDDY: Congressman, if -- if you'll -- if you'll let me explain, I very much want to comply with your request. I would hope it doesn't take a subpoena. If -- if it does, then we will obviously comply with the law.

I'm just really concerned about the safety of our people, so let -- let me just read two things to you."All the executives and their families should be executed with piano wire around their necks." "My greatest hope: If the government can't do this properly, we, the people, will take it in our own hands and see that justice is done. I'm looking for all the CEOs names, kids, where they live, et cetera."

(END VIDEO CLIP)

SANCHEZ: You know, it's hard to judge these fellows with AIG who are being talked about in this case. But I will tell you this, Bob and Rick.

It would seem to me, it would seem to many of our viewers who have been writing in, and it would even seem to any layman sitting there watching that this fellow Liddy, he did pretty well for himself in front of these guys, did he not?

RICK NEWMAN, "U.S. NEWS & WORLD REPORT": This has the hallmarks of a mafia trial, doesn't it, Rick?

SANCHEZ: Yes, it does. And a couple of these guys were mature about the lambasting. But a couple of them almost seemed to be going overboard. It's almost like this is the wrong target.

NEWMAN: Yes. Well, it really is the wrong target for the most part.

Liddy -- as we're learning through all this testimony, Liddy did -- he is the guy who was in charge who signed off on these bonuses. But he's saying, of course, that his hands were tied, because the contracts that determined the bonuses were basically written.

In other words, this was a done deal a year ago. But he's got several -- he does have several members of the committee defending him. And they keep pointing out, we understand you're not the guy who caused this mess. You just came to help solve it, and just help us provide some answers.

So, he is having a tough time today. But he is holding up so far.

SANCHEZ: Bob, I want you to listen to -- I want you to listen to some sound. This is him explaining why, because what he's trying -- this is important, for everybody sitting home listen to well. What this man's argument is, is the following.

TARP in general is necessary, and saving AIG is necessary for the good of the entire economy. For the good of every single one of us who lives in the United States. So, it's more important to save that than it is to save this $165 million. That's his argument.

Here's how he makes it. Bob on the other side. Let's go to it.

(BEGIN VIDEO CLIP)

REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: Do you realize that the actions that you take at AIG and took in this precise case not only impacts AIG and the potential of that reality occurring that you described, but it may have jeopardized our ability to get a majority of this Congress to support further largess to provide funds to prevent a recession, depression or meltdown.

Are you aware that that's the process of your decision and how important it was?

LIDDY: I am, sir, although I think there's also a question of -- of another element, and that is, if something happens to AIG and it goes bankrupt or goes belly up and puts at risk all the money that has already been put into it, that also can have dire consequences.

(END VIDEO CLIP)

SANCHEZ: Bob Lenzner, is he right?

ROBERT LENZNER, NATIONAL EDITOR, "FORBES": I think he is right.

But I think we should look at it this way. We're going to -- those bonuses are going to be given back one way or another, whether they're going to be done voluntarily, as he told us some people have already said they would, or they're going to be done by force.

SANCHEZ: But...

LENZNER: The public opinion is going to demand that. So, I think -- and this is something that all these congressmen -- and ordinary people can understand this. But I think it's much more difficult for them to understand the significance of propping up AIG to make sure that it doesn't go under.

Now, I want to say one more thing.

(CROSSTALK)

SANCHEZ: Go ahead. Go ahead.

LENZNER: One more thing. What we also found out that I didn't understand before is that on these payments to Goldman Sachs and Deutsche Bank and all these other people, they shouldn't have been payments in cash.

They actually -- all AIG really had to do was to put up additional collateral. So this has never been explained to the public either. And a further hearing is going to be held on this. There's no question about it that there's a lot of funny business that's going on here.

(CROSSTALK)

SANCHEZ: Let's do this, Bob. I'm going to hold you right there, because we have got to get this break in. But I want to pick some of that conversation back up on the other side.

And I would like to be smart about this. I would like to be able to put this in perspective. Out of the possible $4 trillion that we're talking about for saving the economy and all the money that's going to be involved in this rescue or bailout or whatever you want to call it, how much is $165 million?

It comes out to be a real minuscule amount, not that it's still not significant, but I want to get that involved in the conversation as well.

Thanks, guys.

Stay with us.

(BEGIN AUDIO CLIP)

SANCHEZ: Hey, this is Rick Sanchez. Thanks for calling. CALLER: Hey, Rick. It's Hugh (ph) from Washington.

Congressman Sherman from California said it all. The federal taxpayers are paying tens of billions of dollars of bets that AIG lost to the giant foreign banks. This is outrageous.

Thanks, Rick.

(END AUDIO CLIP)

(COMMERCIAL BREAK)

SANCHEZ: Welcome back.

Should AIG give the money back? And, by that, I mean not AIG as a corporation, but some of the traders that were involved in getting $165 million.

You have heard a compelling argument by Ed Liddy, who's in charge of the company right now.

Here's what some folks are saying on Twitter.

Let's go over here to Crunk84. He seems to be saying: "Liddy's basic argument is that the end justifies the means, a classic defense. It's a cop-out, though, and sounds more cliche." Interesting comment.

Now, I want you guys, I want Bob Lenzner and Rick Newman to think about this, if you possibly can. You have got a situation where you have got $165 million out of what could end up being a bailout that we all end up giving these corporations of something like $4 trillion.

LENZNER: Rick?

SANCHEZ: Yes?

LENZNER: The system has run amok here. The $165 million, as you say, are a small amount of the overall bailout money...

SANCHEZ: We did the math, Bob. It comes out to like a thousandth -- oh, my goodness. We just lost Bob while we were having that exchange.

It comes out to -- are you back? Are you there?

NEWMAN: Rick, I will happily pick up.

You're making a valid point. And here's another way to look at it. The markets, the stock market, these -- stock markets don't care about these bonuses. The stock markets didn't move when the bonuses were revealed. They haven't moved because the bonuses are now going to be paid back or partly paid back. The stock markets care a lot about what happens to AIG, what happens to these counterparties.

(CROSSTALK) SANCHEZ: In fact, let me back up your argument there. The stock market has been going up since -- I have been watching -- since Liddy has been talking. And it was kind of down before he started giving his explanation.

NEWMAN: Yes. And I think that has to do with other news from the Federal Reserve today.

But if we go back six months to when Lehman Brothers failed and AIG almost failed, and the Fed and the Treasury stepped in, there are a lot of people now who, with some hindsight, think the threat that really may have really caused the credit freeze back then was -- obviously Lehman had a lot to do with it, but maybe AIG was even a scarier problem, if that -- if AIG had collapsed.

And we're now seeing why, as we see this list of counterparties and so on.

(CROSSTALK)

SANCHEZ: And, Rick, we get that. That's his basic argument. That's what this man is here to say. As a nation, as a world, he seems to be saying globally, we can't allow this company to go under. So, let's not get caught up in some picayune detail. We get that.

(CROSSTALK)

NEWMAN: It still doesn't justify the bonuses.

SANCHEZ: But wait. There's another part of this argument. You could throw that argument back in his face, as Gary Ackerman of New York did, and say, since it's so small, why are we going through all of this for the sake of $165 million?

In fact, he looked at him and he said, do we do me a favor. Pay the money back. Here's the bite. Let's listen to it together.

(CROSSTALK)

REP. GARY ACKERMAN (D), NEW YORK: We are here to help you over those bumps in the road, because you're not going to make perfect decisions all the time. And you have just hit one of those bumps in the road. So, I want to try to help you. So, maybe you can...

LIDDY: Thank you. I need all the help I can get.

ACKERMAN: This old schoolteacher is going to give you a little bit of advice. Pay the $165 million back.

(END VIDEO CLIP)

SANCHEZ: He's telling him. I mean, and there's very few guys like -- and you cover this guy -- this Gary Ackerman out of New York. He speaks what he thinks. He says what he thinks.

And it may not -- it may be very sound advice in this case, given, if nothing else, what's been going on in this country over the last 48 hours over this AIG deal.

NEWMAN: It sounds like an offer he can't refuse, doesn't it?

(LAUGHTER)

SANCHEZ: But he refused it.

NEWMAN: And Liddy obviously came prepared with a little bit of ammunition of his own today, when he announced that some of this bonus money has already been voluntarily paid back.

You can imagine that the -- it's about 450 people who got these bonuses are sitting there thinking, yes, this is all I need, is to get the New York attorney general on my case, the Congress subpoenaing me, and the whole world knows my name.

That right there is a pretty strong incentive I think to give back some of this money. And, if that's not enough, we could face the prospect of hearings with some of these guys down the road, which I think Barney Frank has been hinting at.

SANCHEZ: We're going to pick up -- we're also going to be picking up on a lot of news. I know you have been following a lot of the elements. There's a lot of news that came out of these hearings today. And I know you, being a newshound, Rick, have been following a lot of them. You and I are going to be talking about a lot of those on the back end.

Stay with us. We will be right back.

NEWMAN: OK. Sure thing.

(COMMERCIAL BREAK)

SANCHEZ: I'm looking at your comments and they're coming in wild and woolly and we're going to be sharing a lot of those. We're also going to be getting back to Rick Newman. And if we can get Bob Lezner back, we'll certainly try to get him. We also have got some congressmen that we're trying to hook up with. It's difficult because they're all voting right now but we'll try to get to that as well.

What I would like to do now is address this whole business of AIG. You've been hearing from Ed Liddy, who like we said, may have done well for himself, given the fact that he's been given a situation that's very difficult. Some people would argue that what he's doing is something any American would do for their country. In fact, those words were used today during the hearing. But who are the other guys who have been involved with this company, AIG? Where are they? Who are they? What are they saying? Our investigative reporter, Abbie Boudreau has been asking those questions as well and she's good enough to join us now to give us some insight into this. What do you have?

ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT: So much of the attention is going to these executives but what about the board of directors. The board of directors is supposed to be the shareholders' last line of defense. Its job is to make sure the company does not fail. According to AIG's own corporate governance rules, the board has oversight of approving executive compensation. Though we don't know whether the board approved that $165 million bonus pool paid in 2008 that everyone seems to be talking about. We do know that the majority of board members have held their positions during AIG's catastrophic decline all the while continuing to pull in hundreds of thousands of dollars in fees.

According to the executive pay watchdog group, the corporate library's 2008 survey of director pay, AIG's board paid itself nearly $4 million in 2007 alone, when AIG's troubles first became evident. Nearly half of that was in direct cash payments. The payments in 2007 ranged from $230,000 to about $400,000 in cash and stock. That may not sound like a lot of money, considering the millions in bonuses that AIG is now being criticized for handing out. But the directors earned those fees for just nine full days of committee and board meetings, which means an average paycheck of about $30,000 for each member for a single day's work.

Four of the directors, including newly installed board chairman and CEO Edward Liddy, who you've been seeing for the last hour on CNN, joined the board in 2008 after the company received federal money, and the other seven members sat on the board long before AIG started to crumble. So AIG declined to comment on any matters related to the board of directors, or its compensation. We also reached out to most of the board members for comments. So far, no one is talking. The company is set to release its 2009 proxy statement in April, which will detail payments to board members in 2008. And of course, that should be interesting, because that's when AIG first started accepting the $1 billion in the tax bailout.

SANCHEZ: It's so easy to jump all over AIG in this case.

BOUDREAU: Sure.

SANCHEZ: Because they are a fat and juicy target.

BOUDREAU: Right.

SANCHEZ: But let's talk skinny here. Let's talk about the real deal. From 1998 to 2008, all the regulations seemed to go out the door. Five billion was paid to influence the politicians who made sure some of those regulations went out the door. So the viewers sitting here watching you do this story, and telling about the guys on the board of AIG, they're wondering who in the heck was supposed to be watching these guys? Who was supposed to be the person who was watching them? Or at least setting up the laws so somebody would be there to watch them?

BOUDREAU: The board members are overseeing themselves. And they're in charge of determining their own compensation.

SANCHEZ: Nice.

BOUDREAU: Explain that. That would be nice.

SANCHEZ: Not only are there no rules -- maybe I shouldn't say no rules, but very few rules being followed, and very few regulations, but then in the end they're there to regulate themselves. That's like the fox watching over the henhouse.

BOUDREAU: That's the problem that we're continuing to see every time we're talking about this story or others like it in the bailout.

SANCHEZ: And you wonder why the American people are angry. Good stuff, Abbie. We appreciate you bringing that to us.

We're also going to have this, what does this video have to do with the AIG mess? It's amazing to watch. Think personal responsibility. Think selflessness. Just think.

(BEGIN AUDIO CLIP)

SANCHEZ: Hey, this is Rick Sanchez. Thanks for calling.

UNIDENTIFIED FEMALE: Hey, Rick. I think all the AIG execs should take all their little bonuses, put it together and disburse it to members of the military who fight and die for their right to live their lavish lifestyles every day.

(END AUDIO CLI P)

(COMMERCIAL BREAK)

SANCHEZ: Welcome back. I'm Rick Sanchez here in the world headquarters of CNN. We're flying free here trying to get to as much information as we can. Coming out of these hearings that we've been watching today, especially the one at the end with Ed Liddy, he is the guy now in charge of AIG, with all the controversy about AIG. Let me just share with you some headlines, if I can. I know a lot of you folks are coming home from work, you may have missed some of these. So let me kind of catch you up. First of all, Liddy says he's trying to get 50 percent of the money back from the traders, and that some of them, some of these traders, that got this $165 million in retention bonuses, are actually saying they're willing to give back 100 percent of the money.

Another really important story that's coming out of all of this that we've probably learned in just the last couple of hours. Ed Liddy's really firm position that we shouldn't be paying as much attention to this as we should the good of the whole. And he describes the good of the whole as saving AIG, making sure T.A.R.P. works, making AIG work for the good of the entire economy, which could become a much bigger problem down the line. So he says he doesn't want to jeopardize the T.A.R.P. deal. A lot of other elements that are coming out of this that we're going to be sharing with you, let me get to this now though as well. This is interesting.

AIG, the bailout and the accompanying lack of financial oversight, so far this hour we have been talking about people not doing the right thing at their respective jobs or duties, right? It's obvious when you look at AIG. Especially when you look at those default credit swaps, which just seem disgusting on their face. Most would agree. But now I want you to take note of one blue collar guy, Joe Citizen, all right? He's not a guy at AIG who was shirking his responsibility. He went out of his way and he puts his own livelihood at risk to help a total stranger. Not only did he save her life, but possibly others. This is all captured on a police dash cam. You ready?

This is one of those we had to show you today. AIG guys not doing their jobs, these guys go beyond the call. We're talking about a truck driver. His name is George Lancy, earlier this month on a West Virginia highway he sees Joan Hamplin, she's behind the wheel of a car, you see. But she's incapacitated. She's unconscious. She's having a heart attack and her car goes out of control. He's afraid for her. Lancy has the presence of mind to use his truck in a controlled stop of Hamplin's car. She's now ok after surgery. He may have saved her life. She's very thankful for what he did. He modestly says he's no superhero. He says, quote "I've got no mask, I've got no cape. It's just something you've got to do." Wow. Someone recognizing a problem and finding a solution. By George!

Now, who can stop AIG from its own road to insolvency? We are taking this story apart for you. And by the way, is it just about the bonuses? Two republican senators give it to the treasury secretary, Tim Geithner. I mean, they are asking him -- they are pointing the finger at him. And in large measure, pointing the finger at the president of the United States as well. We're going to be talking about what they're saying when we come back.

(BEGIN VIDEO CLIP)

SANCHEZ: There's a great company called, I can't believe it's not butter. You know, at least they have the decency to tell you it's not butter. I mean, this is insurance without being insurance --

(END VIDEO CLIP)

SANCHEZ: Oh, yeah. Then there's Gary Ackerman making a name for himself by calling out the bankers when they come to Capitol Hill. Representative Gary Ackerman, he takes on AIG today, in large measure, and in many ways, and in different platforms, we've got a lot of that grilling for you.

(BEGIN AUDIO CLIP)

SANCHEZ: Hey, this is Rick Sanchez. Thanks for calling.

UNIDENTIFIED MALE: Hey, Rick, it's your buddy angry Bob in New York. Those AIG bums, hey, I've got to tell you something. Did you hear what they did to the melamine guys in China who spiked the milk with poison? Up against the wall. So I think we should get all the AIG guys bonuses in the form of full metal jackets. Enough of these guys. We've got to tear them apart. America first, and rich and obnoxious people second. All right thanks a lot Rick, bye.

(END AUDIO CLIP)

(COMMERCIAL BREAK) SANCHEZ: First to the Twitter board. Let's do that, Johnny B. Goode. Ashton is watching, Ashton Taylor. He calls himself, as for Liddy he says, wrong guy. All of this was not under his watch. They should just give the money back. Same point made by Gary Ackerman. Let's get back on the Gary Ackerman show, as a matter of fact or Congressman Ackerman I should say. Also talk a little bit today about those credit default swaps. Those are the instruments that I have been explaining to you since Monday. It was really -- this is the gasoline that was thrown on this fire that suddenly exploded into this economic mess that we have now.

We learned today, on the record, in one of those hearings, new information, that these default swaps stopped in 2005. Nonetheless, they were such a huge problem, that they were talked about at length today in these hearings. Here is Gary Ackerman's description of them.

(BEGIN VIDEO CLIP)

ACKERMAN: There are these two guys out on a life raft. And they're adrift at sea and a storm blows up and the raft is surrounded by sharks and the waves are 10 feet high. And the first guy says I'm scared. So the second guy sells him a policy. That's a credit default swap. You're selling something with absolutely nothing to back you up. You have no money, possibly, in your pocket or your wallet. And if everything goes right, you're collecting a premium and if everything goes wrong, so what. Makes no sense. It's like snake oil salesmen selling you jars of snake oil, and they don't even have the oil in the jars. I mean, there's a great company called, I can't believe it's not butter. You know, at least they have the decency to tell you it's not butter. I mean, this is insurance without being insurance, because if they called it insurance, they'd have to have money to pay you off. But they don't have the money to pay you off. And they're calling it credit default swaps, because if they called it, I can't believe it's not insurance, maybe nobody would buy it.

(END VIDEO CLIP)

SANCHEZ: You've got to love Congressman Ackerman's descriptions. Let's go back to Rick Newman. You know what's interesting, as we look at this now, and it's somewhere between sad and funny because it seems so stupid that something like this was allowed to happen. But why wasn't anyone recognizing this back in 2005, or 1998 to 2005, which is apparently when they were hot and heavy on these things?

NEWMAN: I think what we know now is that this small unit at AIG, this financial products unit, they were very clever about finding a loophole in all the regulations. They set up something that looked like it was part of the huge insurance operation at AIG, and we've been hearing about these credit ratings that it essentially borrowed from the insurance companies, which were very solvent and very highly rated, implying that those credit ratings applied to these credit default swaps, which they didn't. They were making a lot of money. By the way, this unit accounted for a lot of revenue at AIG for a couple of years. But they planned all this upside, and they just did not have any reserve in place for when the worst case scenario happened, which is obviously what happened. SANCHEZ: Too many people, both in the political spectrum and the regulatory spectrum sat there going tweedle di, tweedle dumb, what's going on, we don't recognize it. Thanks Rick, we'll get back to you in just a minute.

By the way, who was it who actually put the claws in this bailout bill that allowed AIG to remain or get this $165 million in retention bonuses? Who did that? We wanted to know. So Drew Griffin, investigative reporter, sets out to find out. There he is. He's going to sit right next to me in just a moment and take us through what he found out.

(BEGIN AUDIO CLIP)

SANCHEZ: Hey, this is Rick Sanchez. Thanks for calling.

UNIDENTIFIED MALE: This is Robert from Greensboro, North Carolina. Hey, Rick, I think a lot of our anger is misguided. We should channel the majority of our outrage at the government officials who let this happen. The government is showing time and time again that they are incapable of pragmatically regulating the economy. The people who received these bonuses should not be forced to give the money back. That just results in giving an incompetent government more power to mess things up. They should willingly return the money to repair their own reputation and the reputation of AIG. Thanks.

(END AUDIO CLIP)

(COMMERCIAL BREAK)

SANCHEZ: Why are we arguing about this $165 million now? Didn't someone when they wrote up this stimulus bill, when they were preparing all the bailouts, know that this was in there? There has to be a clause may actually even be a clause, in the actual contract, so somebody knew. Who knew? Let's go to Drew Griffin, he's got some information for us on this. Who knew?

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT: Rick, it's confusing because there is so much money going on there and so many different bills, but this is from the first outrage. T.A.R.P. money goes out under the Bush administration, no strings attached. So the congress comes back into session with new President Obama and they're going to attach some strings to that money back then, that's what we're talking about. So here's what we know. That during the talk of the stimulus bill, Senator Chris Dodd wanted to put some controls on that first bailout legislation, the Troubled Asset Relief Program.

So he did write in an amendment into this bill which would have limited this bonus pay, would have clamped down on it, would have taxed it, but for one little clause that somehow mysteriously got in there, we can show it to you. I think we might even have it up on the screen. It basically says, if you read through this, that it prohibits any bonus payment -- it's construed to prohibit any bonus payment required pursuant to a written employment contract executed on or before February 11, 2009. Basically this is saying that any agreement you had before February 11th is valid and congress cannot touch it. That is basically what we're trying to find out, who put that clause in. That congress passed and the president signed. So far, everybody is in denial, including Senator Chris Dodd, he is the head of the senate banking committee, the largest recipient of AIG political cash. Last year, he got $103,000. He told producer Ted Barrett yesterday afternoon he flatly doesn't even know it was in there. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's the suggestion today being made that you received more money from AIG than any other senator. And that you were responsible for the February 11th 2009 date. Again, I just want to get at the -- you're saying you had nothing to do with that date.

SEN. CHRISTOPHER DODD, (D-CT) BANKING CHAIRMAN: Absolutely not.

UNIDENTIFIED MALE: And it was nothing you were doing that was aimed at protecting AIG --

DODD: Not at all, not in the slightest, absolutely.

UNIDENTIFIED MALE: Which has office, this particular office --

DODD: It does but the point is, when that language left the senate that I wrote, that was not included.

(END VIDEO CLIP)

GRIFFIN: Pretty firm denial there.

SANCHEZ: I don't know anything about that language.

GRIFFIN: So who does? Somehow, it mysteriously appears in the conference committee.

SANCHEZ: You know what's interesting about this, we watched Ed Liddy today, go before the American people and say look, we did what we did because we had to rescue the sinking ship. And it may have had something in there I now regret, but he was seemingly forthright and honest and earnest about it. Whether you agree or disagree with what he did, why can't these guys that you talked to, it's not to put it all on Dodd, but all of these quote, politicians, just come clean and say, it was a sinking ship, we had to get this legislation through, it may have been an oversight, we didn't notice it and $165 million is really a miniscule amount compared to the 4 trillion that we're going to end up giving these guys. Why not just be open and honest about it?

GRIFFIN: Because this is now a political hot potato. Everybody is screaming about this. They want somebody's head to roll. Your viewers are outraged by this.

SANCHEZ: They are damn well outraged. You're a reporter, asking them a serious question, why can't they be honest with you? Even if it means I'm taking a hit. GRIFFIN: Senator Dodd head of the banking committee doesn't know how this legislation got written. Congressman Barney Frank, head of the house financial services says he doesn't know. Take a look at the conference committee, these are five senators and five congress people who go together and they decide the final language of the bill. We've called them, every single one of them. Inouye has called back and said it's not me. So now we have four out of five saying it's not me.

SANCHEZ: You have to love that.

GRIFFIN: We're waiting for Senator Cochran, his staff is checking. We have called, they've gotten back to us, they're checking. But so far, four out of five say not me. House, let's go to the house. All of them in the house conference committee say, not me. Rangel and Obey should be updated, they've called and said not me. Nobody, nobody knows, nobody read it. They all passed it, they all signed it.

SANCHEZ: But again, you can't help but go back to why not just deal in truth. These guys have taken $5 billion, according to the American Education Foundation, over the 10 years between 1998 and 2008 to influence what happens with bank regulators, vis a vie what goes on. And now, they may have made this mistake. Just deal with it and say, we've got to move forward. It seems like they're not being honest with the American people. That's what your report points out. I think that's what -- that's what tees people off probably more than anything else. I hope you get to the bottom of this.

GRIFFIN: Me too.

SANCHEZ: Who put the clause in there?

GRIFFIN: That's right. Who wrote it? Somebody wrote it. It was in English and it was in the bill.

SANCHEZ: Not me. You've got to love it. Drew, thanks so much. Good stuff, good reporting.

When we come back, we'll tell you what's going on with the market today. And oh my goodness, still up, after all these things. Stay with us. We'll be right back, we're taking you to Wall Street.

(COMMERCIAL BREAK)

SANCHEZ: Welcome back, I'm Rick Sanchez here in the world headquarters of CNN. We call this road to recovery. By the way, programming note. Tonight at 7:00, President Obama's going to be having a town hall meeting. CNN will be carrying that thing live. Going back to Ed Liddy and his much expected speech today, it almost came out like a Shakespearean moment, remember in Julius Cesar when Mark Anthony comes out and has to make his explanation. Read what we're getting now from Myspace, this is interesting. "Watching this hearing, Ed Liddy is the only one who sounds sane and level headed." So this guy, much like Mark Anthony shows up, the crowd is angry, they're about to humiliate him and instead he kind of turns it on them, does he not. One more, let's go to Twitter if we possibly can. Get the one right there in the middle if you can Johnny. This is interesting. "This is why the American people must vote these old fossils out of office and demand term limits. Quit lying." Is what they say about the politicians today when they were talking.

All right, what are we doing? Want to go to break? Susan Lisovicz standing by with what's going on in the markets today, what do you have?

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: We had a nice rally. Ben Bernanke-fueled rally. The Federal Reserve taking more extraordinary measures to bolster the economy and AIG shares up 42 percent on the day. Rick, back to you.

SANCHEZ: AIG's up, the market's up since Liddy talked. Wolf Blitzer standing by now to take us into "THE SITUATION ROOM" -- Wolf?

WOLF BLITZER, CNN ANCHOR: Rick, thanks very much. Happening now, a bailed out company caught in a tidal wave of rage, asks some executives to give their bonuses back. AIG's chairman facing angry lawmakers and President Obama says the buck stops with him in this mess. Plus, help wanted over at the FBI.