The easiest way to tell this story is to post the text of a letter I sent to my Senators and Congressman yesterday.  Here it is: 

"March 19, 2009  

Sen. Christopher Dodd, Sen. Joseph I. Lieberman, Hon. John B. Larson  

Re:    Duplicate Payments to AIG Counterparties?  

Gentlemen, 

I noticed that several prominent financial services firms that received TARP funds last year also appear on the recently-released list of counterparties to be paid by AIG from bailout funds.   

These firms include AIG International, Bank of America/Merrill Lynch, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Wells Fargo/Wachovia, and possibly others.  The total of counterparty payments due to these firms from AIG appears to be at least $30,900,000,000. 

This presents the possibility that some of these firms could have applied for and received TARP funds last fall, in anticipation of defaults by AIG; and are now in line to receive payment by AIG.  Thus, they stand to be paid twice, with the money for both payments coming from taxpayers. 

This possibility raises three questions: 

1.                 What controls, if any, are in place to guard against this kind of double-dipping?   

2.                 If no controls are in place, what steps will be taken to forestall the possibility of such duplicate payments and who will take them?   

3.                 If duplicate payments have already been made, what steps will be taken to recover the money and who will take them? 

In the ideal world, companies receiving duplicate payments to the same account would return the money on their own.  But, as recent experience has amply shown, these firms cannot be trusted to "do the right thing" under almost any circumstances.  This would certainly be one of them. 

Could you gentlemen please look into this matter and let the public know the extent of any such double-dipping?  If, as I suspect, double-dipping is found, what steps are being taken to protect taxpayer interests? 

Thank you.                                                          

Very truly yours,                                                      

Richard E. Wise"  

This kind of double-counting is the bane of every auditor's existence.  That is all the more true when different auditors may be looking at different funds, which were authorized at different times under different administrations, with different authorities and different payees. 

What's more, in light of recent events involving bonuses and who knew what when, it is hard to believe that anyone in the Treasury Department actually anticipated and designed a mechanism for preventing duplicate payments on the same troubled assets. 

It is even harder to believe that if a Citigroup (which received $50 billion from the TARP fund and will soon receive $2.3 billion in counterparty payments from AIG) detected any such double payments it would volunteer to return the money to the Treasury.  "Take the money and run like a bunny" would be their credo. 

If you share this concern, feel free to copy the text of my letter onto your own stationery and send it to your elected representatives.  Their addresses and fax numbers should be listed on their websites (I omitted them here for formatting reasons).   

Then, if you receive any responses, feel free to post them as comments on this note. 

Author's Bio: Rick Wise is an industrial psychologist and retired management consultant. For 15 years, he was managing director of ValueNet International, Inc. Rick was a Vietnam-era Navy Hospital Corpsman. Rick holds PhD and M.Ed. degrees from Penn State. His BS is from West Chester University. He completed post-doctoral work at Rensselaer, Northwestern, University of Colorado, and Harvard. A native of Pennsylvania, Rick now lives in New England.

www.opednews.com/articles/Duplicate-Payments-to-AIG-by-Richard-Wise-090320-359.html