Did AIG's entire risk management team fall down on the job? Or, like the firm's auditors, were they prevented from doing it?

Yesterday we told you about Bob Lewis, AIG's chief risk officer, who still has his job despite a rather obvious failure to ensure that the firm wasn't taking on an unmanageable level of risk.

But it looks like it's not just Lewis. The Wall Street Journal reports that several longtime members of AIG's Credit Risk Committee are also still in place. That committee, says the paper, was in charge of overseeing those disastrous credit default swaps.

At least five of the committee's ten members have served for several years. In addition to Lewis, the chief risk officer, they are:

- Kevin McGinn, chief credit officer and chairman of the committee
- Win Neuger, chief executive of AIG Investments;
- William Dooley, head of AIG's financial-services division, which includes the financial-products unit that sold the credit-default swaps, and...
- Barbara-Ann Livanou, director of financial institutions in the credit-risk-management department.

Lewis and McGinn appear to be the most directly implicated here. It was Lewis' department, of course, that handled the company's "major risks," according to SEC filings looked at by the Journal. (A former AIG exec yesterday confirmed to TPMmuckraker that Lewis' role would have been to avoid letting AIG get into the exact position that brought it down.)

As for McGinn, he headed a department focused on credit risk, and reported to Lewis. That group's "primary role is to support and supplement" the Credit Risk Committee's work, according to the SEC filing. At a December 2007 meeting, McGinn assured investors that "essentially" every credit default swap was overseen by the risk committee.

But another interesting name on the list is that of Dooley. As head of the financial-services division, Dooley worked closely with AIGFP chief Joe Cassano -- the man who was primarily responsible for pushing the unit into the credit default swaps -- according to a 2004 deposition that Cassano gave in a breach of contract case. Cassano said he consulted with Dooley, for instance, before asking key executives to resign.

But there are signs that the access of figures like Lewis, McGinn, and Dooley to AIGFP's books was limited. We've already reported how Cassano took steps to keep the firm's internal auditor in the dark. But the Journal adds that at a January 2008 meeting, AIG's auditor, PricewaterhouseCoopers, concluded that the access to AIGFP enjoyed by Lewis' departments and other groups "may require strengthening."

And:

Two months later, the federal Office of Thrift Supervision, which regulated AIG's financial-products unit, sent a letter to the company, also released by Congress. OTS said the unit "was allowed to limit access of key risk control groups while material questions relating to the valuation of the [swap portfolio] were mounting." The OTS said those "control groups" included Mr. Lewis's department and an official in the financial-services division, which Mr. Dooley oversees.

At a congressional hearing last week, Rep. Gary Peters (D., Mich.) asked AIG Chief Executive Edward Liddy, "Where was the risk management of your company? Where was the failure of your own internal risk-management procedures?"

Mr. Liddy responded, "We had risk-management practices in place. They generally were not allowed to go up into the financial-products business.

So did Cassano succeed in cordoning off AIGFP from any external scrutiny? If so, how? And how much blame attaches to figures like Lewis, McGinn, and Dooley -- not to mention Martin Sullivan, who ran AIG in the years leading up to its collapse? Those sound like pretty good questions for the many AIG investigators to pursue.

Late Update: The rest of that exchange between Rep. Peters and Liddy -- after Liddy had said that AIG's risk officers weren't allowed access to AIGFP -- is worth looking at:

REP. PETERS: How could that be? How could they not be allowed to go, when they are putting trillions of dollars at risk?

MR. LIDDY: I -- as I said earlier to someone's similar type question, you need to get the people who ran FP -- Mr. Cassano -- and the people who ran AIG before my arrival, and ask them that question.

REP. PETERS: Yeah. Well, that's a big question.

Sure is.