Towns Demands Explanation for AIG’s Hiring of PR Firms

Posted April 14, 2009 at 4:45pm

House Oversight and Government Reform Chairman Edolphus Towns (D-N.Y.) is demanding that American International Group explain whether it may have used federal bailout dollars to pay for a public relations campaign to combat its critics.

“I would be extremely disappointed to learn that any of the billions of taxpayer dollars invested to support AIG may have been diverted to finance a public relations campaign against critics of the AIG bailout,— Towns said Tuesday in a letter to AIG Chairman and CEO Edward M. Liddy.

Towns fired off his letter amid allegations that AIG contacted the media to attack the credibility of former AIG Chairman and CEO Maurice Greenberg on the eve of Greenberg’s testimony before the Oversight committee. Greenberg spoke to the panel on April 2 about the collapse of AIG, which has taken $182.5 billion in federal funds.

In the letter, Towns requests records relating to AIG’s retention of Burson-Marsteller and Hill & Knowlton, two public relations firms hired to represent it on federal bailout matters. He asks that AIG deliver those records, along with information about any other subcontractors hired to address criticism of the AIG bailout, no later than April 28.

Towns is seeking the records as part of the committee’s ongoing investigation into the firm’s use of bailout dollars.