A banker lying? What a surprise

The International Herald Tribune has an article by Mary Walsh (no, not Hemingway's wife; she's dead) about AIG and your tax money:

The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.
"You don't just suddenly lose $120 billion overnight," said Donn Vickrey of Gradient Analytics, an independent securities research firm in Scottsdale, Arizona. Vickrey says he believes AIG must have already accumulated tens of billions of dollars worth of losses by mid-September, when it came close to collapse and received an $85 billion emergency line of credit by the Fed. That loan was later supplemented by a $38 billion lending facility.
But losses on that scale do not show up in the company's financial filings. Instead, AIG replenished its capital by issuing $20 billion in stock and debt in May and reassured investors that it had an ample cushion. It also said that it was making its accounting more precise. Vickery and other analysts are examining the company's disclosures for clues that the cushion was threadbare and that company officials knew they had major losses months before the bailout.
Tantalizing support for this argument comes from what appears to have been a behind-the-scenes clash at the company over how to value some of its derivatives contracts. An accountant brought in by the company because of an earlier scandal was pushed to the sidelines on this issue, and the company's outside auditor, PricewaterhouseCoopers, warned of a material weakness months before the government bailout. The internal auditor resigned and is now in seclusion, according to a former colleague. His account, from a prepared text, was read by Representative Henry Waxman, Democrat of California and chairman of the House Committee on Oversight and Government Reform, in a hearing this month.
These accounting questions are of interest not only because U.S. taxpayers are footing the bill at AIG but also because the post-mortems may point to a fundamental flaw in the Fed bailout: the money is buoying an insurer — and its trading partners — whose cash needs could easily exceed the existing government backstop if the housing sector continues to deteriorate.
AIG has declined to provide a detailed account of how it has used the Fed's money. The company said it could not provide more information ahead of its quarterly report, expected next week, the first under new management. The Fed releases a weekly figure, most recently showing that $90 billion of the $123 billion available has been drawn down.
AIG had come under fire for accounting irregularities some years back and had brought in a former accounting expert from the Securities and Exchange Commission. He began to focus on the company's accounting for its credit-default swaps and collided with Joseph Cassano, the head of the company's financial products division, according to a letter read by Waxman at the recent congressional hearing. When the expert tried to revise AIG's method for measuring its swaps, he said that Cassano told him, "I have deliberately excluded you from the valuation because I was concerned that you would pollute the process." Cassano did not attend the hearing and was unavailable for comment. The company's independent auditor, PricewaterhouseCoopers, was the next to raise an alarm. It briefed Sullivan late in November, warning that it had found a "material weakness" because the unit that valued the swaps lacked sufficient oversight.
"We may be better off in the long run letting the losses be realized and letting the people who took the risk bear the loss," said Bill Bergman, senior equity analyst at the market research company Morningstar.

Rico says 'let the people who took the risk bear the loss'? What is this guy, a Communist? No good capitalist should ever have to bear the loss of their extremely bad judgement...