Hank Greenburg, the man who built AIG from an obscure corporation to the world's largest insurance company, has an important oped in today's Wall Street Journal that raises crucially important questions about how President Obama and Treasury Secretary Tim Geithner handled the TARP bailout.

"Federal decision makers had six months following the Bear Stearns collapse in early 2008 to formulate an effective response to foreseeable liquidity difficulties in the U.S. financial-services industry," Greenberg writes. "Instead, the bailout turned out to be a rush for funds that benefited some and punished others. Goldman Sachs, Morgan Stanley and others were permitted to become bank holding companies and have access to cheap federal funds, while AIG was denied this opportunity for reasons never fully explained."

Greenberg thus points to the heart of the fundamental problem with TARP - It was a massively expensive illustration of government picking winners and losers in the private sector.

During TARP, Treasury "loaned" AIG $85 billion, which the then-hobbling company agreed to repay at 14.5 percent interest, along with transferring to goverment ownership preferred stock rather than common stock.

Greenberg also points out that AIG shareholders were never given an opportunity to vote on whether to approve the transactions with Treasury. Delaware law, under which AIG is chartered, requires sharehold approval of such changes in ownership.

"It is important that an independent body is convened to seek reasons for these actions," he adds, in an understatement. How about we start with the House Financial Services Committee?

Greenberg is a controversial figure in his own right, but the guy is clearly an insurance and financial services genius, as well as an international corporate diplomat, and much else. Oh by the way, he was among the American soliders hitting the beach on D-Day and won a Bronze Star. The man is certainly not perfect, but I've made no secret of my admiration for Greenberg. Make of that what you will.

Greenberg has been raising troubling questions about AIG and TARP since 2008. It's time somebody in government (and formerly in government as well) was put under oath and challenged to answer those and many more questions about TARP.

Politico reports this response from an unnamed Treasury official to the Greenberg oped:

"The fact that Hank Greenberg is very mad at the government's handling of AIG should make taxpayers happy. It means that previous equity holders got wiped out - more or less - and the gains were socialized. Those who bought in post-bailout (Fairholme Capital) and backed the Treasury plan to restructure with their cash have done very well. "This sentence [from the op-ed] is the most underreported aspect of the deal. 'It has been reported previously that the Treasury expected to make a profit of $22 billion on its investment in AIG. Based on the recent rise in the price of AIG's stock to a year-end value of $57.62 per share, the unrealized profit has increased to approximately $44 billion.'"

That, of course, evades Greenberg's questions.

You can read Greenberg's complete piece here.