Remember, nobody is objecting to the $85 billion loan. It wasn’t actually $85 billion, it was less than that in terms of what was actually lent. But the Federal Reserve made loans to hundreds of hundreds of companies during the bailout, and that’s what they set out to do. Congress had especially set them up during the depression in 1932. They set up the Federal Reserve loan program to give loans to companies in times of crisis. Now, they can only give fully-secured loans, so there’s no risk to the government.

And they’re supposed to charge a reasonable interest rate. But the goal of the whole program was to provide these loans, and nobody was objecting to that. That was perfectly sensible. The thing that was objected to was that out of the thousand loans that the Federal Reserve made under this program, only once did they ever demand that the shareholders give up their equity. That is, they confiscated, in effect, the shareholders equity in AIG.

Now, there was no authority to do that in the statute. They’d never done it before or since. They did it simply for punitive purposes in order to try to make a political point with Congress, and they admitted that from that witness stand. So, it wasn’t any problem with the so-called bailout laws. It was a problem with illegally, without any congressional authority, and in an entirely discriminatory way confiscating the shareholders equity.

And as the federal court held after trial, the Federal Reserve had no authority to do that, and in our democracy, if you’re gonna have a rule of law, government agencies have got to be constrained by the powers that Congress gives them. They can’t just willy-nilly decide they’re gonna start confiscating private companies equity. If they’re gonna do that, that’s a very big step in a free enterprise economy. They need congressional authorization to do that, and they didn’t have congressional authorization.

And a federal court held that. So, the problem here had nothing to do with the loan. The problem had to do was they confiscated the equity, the loan was paid back, they got a rate of interest that the Federal Reserve internally describe as loan shark interest, 12, 14 percent interest. They got all their principle back. They got their interest. And yet they kept the company’s equity. They didn’t return it. It’s not like it was collateral. They confiscated it. That was what was wrong.