According to SEC filings, AIG Liquidity Corp. was created in 1992 as a Delaware corporation. It was a subsidiary to AIG.
That SEC filing says all capital stock is initially owned by AIG which was shown as a money making business ("AIG and its consolidated subsidiaries"), an average of 3.53 pct. "ratio of earnings to fixed charges" from 1998 to June 30, 2003.
A later SEC Filing in 2004 repeats those figures, and sets forth PricewaterhouseCooper as experts on that issue. Other online sources show the optimism continued through 2006.
After Greenberg was ousted from the company in 2007 and J.J. Cassano was put in the lead of the financial products division, things began to change.
Cassano, among other things, discontinued the hedging that Greenberg had kept in place. That means that a major shield of protection was removed.
Perhaps Cassano really did believe his own smoke that the shield was not needed:
"It is hard for us, without being flippant, to even see a scenario within any kind of [rhyme] or reason that would see us losing one dollar in any of those transactions," he told investors.(Out on the False Front, Daily News link). But it was not too very long before reality burned through the smoke and Moody was downgrading AIG:
New York, September 15, 2008 -- Moody's Investors Service has downgraded the senior unsecured debt rating of American Internation Group, Inc. (NYSE: AIG) to A2 from Aa3 in light of the continuing deterioration in the US housing market and the consequent impact on the group's liquidity and capital position due to its related investment and derivitive exposures. The company's long-term and Prime-1 short-term ratings were placed on review for possible further downgrade.(Moody's Notice, pdf). This shows the danger inherent in business propaganda. Those who practice it are eventually caught in its web and they can't get out.
Update: AIG Iraq.