"Back then I said to people, 'AIG is the center of the web.' The financial tentacles of this company stretched to every major investment bank," he said.
"Bonus is a real issue. It touches us viscerally," Spitzer said. But he added, "The real money and the real structural issue is the dynamic between AIG and the counterparties."
Much of the $170 billion in taxpayer funds AIG has received is going straight to the buyers of its instruments, which amounted to a form of insurance on mortgage-backed bonds.
"Virtually all" of the $80 billion-plus in the initial AIG bailout went to the company's counterparties, including nearly $13 billion to investment bank Goldman Sachs alone, Spitzer said.