Nice. Great job, there, Treasury, U.S. Czars. Well, it WAS only 182 billion of taxpayer money. Chump Change! *and a Warren Buffet/Goldman Sachs bailout -$182.5 Billion Bailout âThey incorporated the âhighly speculativeâ line onto that slide for a reason, and someone elected to have it removed,â said Farrell. âBoth of those pieces of information let the reader draw conclusions about what went on at Treasury.â http://www.bloomberg.com/apps/news?pid=20601109&sid=a1aa.saUuNRI Treasury Document Called AIG Investment âHighly Speculativeâ Share | Email | Print | A A A By Hugh Son Aug. 28 (Bloomberg) -- The U.S. Treasury said in a draft of a presentation that its $40 billion investment in the American International Group Inc. bailout was âhighly speculative.â A slide with the phrase was included in documents obtained in a Freedom of Information Act request by Judicial Watch, a group that advocates government transparency. The sentence was omitted from another version of the slide in a presentation describing the November revision to AIGâs rescue in which the insurer got $40 billion from the Treasury. âThe prospects of recovery of capital and a return on the equity investment to the taxpayer are highly speculative,â according to the first of the two Treasury slides. Treasury Secretary Timothy Geithner told Congress in March that New York-based AIG, once the worldâs largest insurer, was saved last year to prevent âcatastrophic damageâ to economic markets. The company still owes the Federal Reserve about $39 billion on a credit line after announcing more than $9 billion in asset sales. âWhy do you take out the fact that we are taking on risks for the taxpayers that are both huge and highly uncertain?â said William Black, associate professor of economics and law at the University of Missouri-Kansas City and a former U.S. bank regulator. âThe last thing you want to spread is a culture in which people arenât being absolutely blunt.â Andrew Williams, a spokesman for Treasury, said the document with the âhighly speculativeâ phrase was a draft created by the previous administration. It isnât clear who at Treasury created the slides, entitled âInvestment Considerations,â and who the intended audience was. âGreater Stabilityâ âWe are confident that Treasuryâs investment in AIG has helped strengthen the institution for the greater stability of the American economy and appreciate Chief Executive Officer Robert Benmoscheâs commitment to the objective of repaying us in full,â Williams said, declining to comment further. AIG stock surged this month after the insurer on Aug. 7 posted its first quarterly profit since 2007 and Benmosche, who replaced Edward Liddy as CEO, said Aug. 20 he expects to repay the U.S. The shares closed yesterday at $47.84 on the New York Stock Exchange, more than three times the July 31 price. âWe believe we will be able to pay back the government and we hope we will be able to do something for our shareholders as well,â Benmosche said in a Bloomberg Television interview on Aug. 20. AIG will rebuild assets and wonât be pressured by regulators to sell businesses at unfavorable prices, he said in the interview. The Treasury documents were turned over last month in response to a March FOIA request from Judicial Watch, according to Chris Farrell, director of investigations at the Washington- based organization. Christina Pretto, an AIG spokeswoman, declined to comment. $182.5 Billion Bailout âThey incorporated the âhighly speculativeâ line onto that slide for a reason, and someone elected to have it removed,â said Farrell. âBoth of those pieces of information let the reader draw conclusions about what went on at Treasury.â In the latest revision to AIGâs rescue in March, Treasuryâs commitment swelled to as much as $70 billion, bringing the bailout package to $182.5 billion. That includes a $60 billion Federal Reserve credit line and $52.5 billion to buy mortgage- linked assets owned or backed by AIG. AIG posted a $1.82 billion second-quarter profit on Aug. 7 on narrowing investment losses and a rebound in the value of some derivatives. The company also benefited from gains in hedge-fund holdings. The insurer has used proceeds from some asset sales to shore up its property-casualty operations rather than repay the U.S. The company retained $2.4 billion from the sale of auto insurer 21st Century to Zurich Financial Services AG and from the public offering of reinsurer Transatlantic Holdings Inc. to improve the âquality of capitalâ at its Chartis Inc. division. Life Insurance AIG won access in November to the $40 billion Treasury investment. Geithner committed as much a $30 billion more in March when the company announced a record fourth-quarter loss. AIG said this month that it tapped $1.2 billion from the second facility to shore up its U.S. life insurance and retirement services operations. The funds helped the units maintain âsolidâ risk-based capital ratios, a measure of an insurerâs strength, AIG said. The insurer agreed in September to turn over a stake of almost 80 percent in exchange for the bailout. AIG said in November, when it announced the $40 billion investment, that Treasury would get preferred shares with a 10 percent coupon. The company said in March that Treasuryâs investment would be modified to âmore closely resemble common equity and improve AIGâs financial leverage.â AIG also won a lower interest rate on its credit line. To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net Last Updated: August 28, 2009 00:01 EDT