$210 Million of AIG Bailouts Went to New Jersey Municipalities

by: Hopeful

Sun Mar 15, 2009 at 09:54:27 PM EDT

American International Group, Inc. (AIG) recognizes the importance of upholding a high degree of transparency with respect to the use of public funds. As a result, after close consultation with the Federal Reserve, AIG is disclosing information identifying certain credit default swap counterparties, municipal counterparties and securities lending counterparties

We're interested in New Jersey politics, so it's the "municipal counterparties" that are of interest:

Municipalities in the states listed on Attachment C received a total of $12.1 billion from AIGFP between September 16, 2008 and December 31, 2008 in satisfaction of Guaranteed Investment Agreement (GIA) obligations. GIAs are structured investments with a guaranteed rate of return. Municipalities typically use GIAs to invest the proceeds from bond issuances until the funds are needed.

The AIG Attachment C (PDF) shows that $210 million of this money went to New Jersey. While there's something to get outraged about just about every day with AIG, if it were not for the Federal bailout our towns would have taken a huge financial hit, as their "guaranteed" safe investments were not.  My reading is that we could literally have owned money on bonds even though the money had been lost.