U.S. lawmakers to grill AIG's Greenberg, Liddy

By Kim Dixon

WASHINGTON (Reuters) - The chairman of a U.S. House of Representatives oversight panel said on Wednesday he will soon call the chief executive of American International Group Inc to testify, amid the committee's ongoing probe of the fall of the insurance giant.

Democratic Rep. Edolphus Towns, chairman of the House Oversight and Government Reform Committee, told Reuters in an interview that he planned to call Edward Liddy sometime in April or May.

"We want to take a very serious look and see if legislation is needed to prevent this from ever happening again," Towns, a lawmaker from New York City, said.

Maurice "Hank" Greenberg, the tarnished former CEO and creator of the controversial financial products unit of AIG, is set to testify on Thursday before Towns' panel. Lawmakers are scrambling to grill officials on the rise and fall of AIG, of which taxpayers now own a 80 percent stake.

At a similar hearing last year Greenberg was a no-show, citing illness. He will be the sole witness at the panel on Thursday.

Towns and other lawmakers will probe him about the financial products unit, created under his watch in 1987. He will be asked to explain how the financial products unit operated during his tenure, and what he knew about the risky credit default swap program.

Greenberg, who was CEO for 35 years, has sought to distance himself from the problems leading to the stunning losses at the company, which has led to as much as $180 billion in taxpayer funds being used to prop up the company.

In a statement issued in advance of the hearing, Greenberg said he would present a plan to revamp the government's aid to AIG, one that relies on "government guarantees and long-term government-funded debt and encourages private capital to replace government ownership over time."