Barack Obama pledged today to pursue “every legal avenue” available to him to stop those much publicized bonuses about to be paid to AIG employees, and most people support him on this.

But there’s more to this story that what is being covered by the mainstream media, like the fact that AIG shareholders never approved the takeover of their company by the Federal government, or that AIG has been the recipient of nearly $173 billion in taxpayer’s money, or more than a thousand times the amount of those bonuses, without one single paragraph of government oversight attached to the “loans.”

The Project on Government Oversight raises some serious questions about the nature of the AIG bailout:

For months now, the press has been revealing that billions of taxpayer dollars passed through AIG and ended up in the hands of Goldman Sachs and other financial institutions that had purchased credit-default swaps from the insurance company. Just this week, The Wall Street Journal and Fortune obtained partial lists of AIG’s counterparties, both of which suggest that Goldman Sachs has benefited enormously from the government’s exceptional assistance.

“Benefited enormously”?

How enormously?

Was saving Goldman Sachs the reason behind the AIG bailout?

The New York Times reported on a meeting that took place in September, 2008:

As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.

The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said…..

So, Goldman Sachs needed “as much as $20 billion” to avoid catastrophe, and AIG has received $173 billion in taxpayer’s money since that meeting in September, more than enough money to bail out GS?

Where has the rest of the money gone?

The Wall Street Journal reports:

Since September 16, AIG has sent $120 billion in cash, collateral and other payouts to banks, municipal governments and other derivative counterparties around the world. This includes at least $20 billion to European banks. The list also includes American charity cases like Goldman Sachs, which received at least $13 billion. This comes after months of claims by Goldman that all of its AIG bets were adequately hedged and that it needed no “bailout.” Why take $13 billion then?

Why is our government using AIG to funnel taxpayer money to bailout foreign banks, and if that’s what was intended, why haven’t we been told this?

Most importantly, was the bailout intended to bail out AIG, or Goldman Sachs?

Or maybe, AIG is just the medium being used to bail out the industry in general, both at home and abroad.

We may never know the answer to those question, but I can make a good argument that the intended recipient was GS, not AIG…or maybe, you want to think that the story below came to be out of sheer coincidence, just days prior to that meeting between The U.S. Treasury Department, and Goldman Sachs’ CEO Lloyd C. Blankfein.

Sept. 23 (Bloomberg) — Goldman Sachs Group Inc. will raise at least $7.5 billion from Warren Buffett’s Berkshire Hathaway Inc. and public investors in a bid to quell concerns that pushed up the Wall Street firm’s borrowing costs and hurt its stock.

Berkshire is buying $5 billion of perpetual preferred shares, New York-based Goldman said today in a statement. Goldman, which this week transformed itself from the biggest U.S. securities firm to the fourth-largest bank by assets, also plans to raise at least $2.5 billion by selling common stock in a public offering.

Goldman Chief Executive Officer Lloyd Blankfein is turning to Buffett, the billionaire investor and second-wealthiest American, to boost market confidence even though Goldman hasn’t reported a quarterly loss since it went public in 1999. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. on Sept. 15 have fueled fears about firms that rely on bond markets for funding.

Ever the Master of Misdirection, Mr. Obama wants to maintain the people focused on his class warfare message, and away from the real truth behind the massive amount of taxpayer dollars being misspent by his administration.

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