The TARP Inspector General is opening an audit on AIG payouts.

American International Group Inc.’s payments to banks including Goldman Sachs Group Inc. after the insurer’s bailout are being probed by the chief watchdog of the U.S. financial rescue program.

Neil Barofsky, special inspector general for the Troubled Asset Relief Program, has opened an audit into whether there were attempts made by New York-based AIG or the government to reduce the payments, according to an April 3 letter he wrote to Representative Elijah Cummings. The Maryland Democrat had requested the probe last month along with 26 other lawmakers.

Lawmakers, frustrated with the cost of an AIG bailout that expanded three times, have asked why about $50 billion was paid after the rescue to banks that bought credit-default swaps from the firm. Legislators want to know if AIG offered less to retire the contracts and whether there was any review about banks’ ability to sustain losses on the derivatives

For background, read The Real Screw Job: AIG Used as a Funnel.

Meanwhile, one of the largest benefactors from these ill-gotten taxpayer funds funneled from AIG, Goldman Sachs, whines about the new corporate propaganda term, protectionism and rails against Buy American trends.

Oh Goldman Sachs, we're really working on stopping protectionism and your Ponzi scheme, insider games and rigging the system is the number one protectionist enterprise we hope is addressed!