Saturday, Jul 23, 2016
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GAO estimates profit from AIG at $15.1 billion

WASHINGTON — The Government Accountability Office reported estimates that the government could pocket $15.1 billion in profit from the bailout of insurance giant American International Group Inc.

The Treasury Department announced that it has agreed to sell $5.8 billion worth of AIG shares to cut the government's ownership stake to 61 percent from 70 percent. The sale, which would produce about $750 million more than originally estimated, would reduce the department's investment in AIG to about $31 billion. The Federal Reserve holds an additional $9 billion.

The government pumped $125 billion into the company to keep it from collapsing in 2008. The GAO said the profit projection did not factor in costs to subsidize AIG over the last few years.

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