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One of the reasons that no one went to jail for the elite control fraud that caused the financial crisis is because of the pervasiveness of the criminality. You couldn’t send one guy to jail without having that guy very publicly rat out everyone else. To get to a high level on Wall Street you had to be dirty, like in a corrupt police department. No one trusts the one guy who won’t take bribes. Which brings us to Maurice “Hank” Greenberg, the former AIG CEO who is now, for lack of a better word, ratting everyone else out.

AIG, of course, is the massive insurance company which was bailed out by the government, with the Fed taking an 80% ownership stake in 2008. The AIG bailout was a strange deal, and it was renegotiated many times over the years. In a normal clean financial company resolution, AIG shareholders would have gotten wiped out. In the bailouts for Goldman, Morgan Stanley, and most of the big banks, shareholders got to keep their shares. AIG shareholders, by contrast, got to keep a little bit of what they had, a sort of split the baby in half deal. Hank Greenberg, as a shareholder, is extremely angry that he was treated this way. He thinks that he was not given equal treatment to Goldman shareholders, and in that he’s right. Most of us think that he should have been wiped out, and Goldman’s shareholders should have been wiped out too, so there’s little sympathy for this very rich man. But it’s utterly true, and everyone (even the most bank-friendly journalist Andrew Ross Sorkin) is acknowledging that it is true, that the government treated AIG shareholders differently. Greenberg is alleging, with good reason, that the motive here was quite sordid.

To understand the backstory, let’s take a quick look at AIG’s role in the housign bubble. Broadly speaking, AIG sells insurance, and one of its divisions (AIG Financial Products) sold a very specific type of insurance called a credit default swap. If you were a big bank and you owned a mortgage backed security, you could buy a credit default swap against the possibility that the security would default. Then, because you owned this insurance, whatever that mortgage-backed security might contain, be it good loans or the most toxic dreck imaginable, it was as good as gold. Default? No problem, AIG had you covered. The problem was that AIG covered everyone in the market, so while the company had a really big balance sheet, it ended up being liable for sums that were larger than the amount of capital it held. There were other serious problems at AIG, such as its securities lending operation, but those aren’t as relevant to the story. And yes, technically speaking, a credit default swap wasn’t legally considered a type of insurance, it was considered a ‘derivative’. But that was just a legal fiction so that insurance regulators, who would have forced AIG to hold enough money to back its bets, couldn’t touch the company. A credit default swap is insurance.

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