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The former AIG CEO’s lawsuit against the U.S. government for forcing it to accept an overly harsh and allegedly needless bailout provides an important and fascinating window into the financial crisis and the (at best) controversial government response.

The American legal system is hardly a great place for staging policy debates, so the court proceedings aren’t likely to resolve still heated disagreements over whether the Wall Street bailouts were necessary, and if they were, whether they were structured competently or in ways that genuinely promoted the public interest. But trials do serve the invaluable purpose of requiring the key policy players to testify about their roles under oath, and thus fill in crucial details accurately while useful lessons can still be learned, not long years afterward, once all the official records are finally unsealed.

So far, two important revelations from the trial stand out, as I see it. First, it’s now clear that, despite their claims that they were healthy enough to weather the storm without Washington’s help, big money center banks like Goldman Sachs desperately needed taxpayer help. That’s because the AIG bailout let them off the hook for collectively choosing AIG to insure such enormous amounts of mortgage deals that went sour.

AIG’s inability to make good on the almost unimaginably huge and reckless level of risk it took on relative to its own resources threatened to deny its Wall Street customers literally tens of billions of dollars’ worth of payouts. Had the mega-insurer collapsed, the world’s biggest banks would have accept immense losses at the worst possible time, with vast near-term implications for the entire financial system’s survival. The terms of the AIG bailout, however, made all of these foolish investments whole. Not a penny of haircuts was required of these Wall Street giants by Washington. Even institutions like Goldman, which hedged impressively against the possibility of an AIG failure, could not have escaped the consequences had scores of weaker players buckled and gone under.

The second important revelation concerns the possibility of the Chinese government stepping in to rescue AIG. More of this story needs to come out, and hopefully will, but what we know so far is that the China Investment Corporation – the Chinese government-run fund for acquiring or taking stakes in non-financial assets (like businesses and real estate) all over the world – had expressed interest in making “a big investment in AIG.”

Then U.S. Treasury Secretary Hank Paulson has testified that he would not have encouraged Beijing’s involvement because he was unwilling to back it up with a U.S. government guarantee. It seems clear so far that the initial inquiry was made by the Chinese. But it also seems clear that Treasury officials thought the idea was worth discussing.

Even though no Beijing buy-in took place, the account is disturbing because it shows that, at least briefly, some in the U.S. government believed that welcoming a large, crucial infusion of capital from the Chinese government was an acceptable option. Did any of these officials worry about expanding the U.S. economic footprint of the world’s most corrupt major economic system? Did any express concern that an American financial system already shot through with domestic cronyism would have become more subject to the influence of state-of-the-art foreign crony capitalists?

Other important questions raised so far by the AIG testimony: Paulson has said that he never personally spoke with the Chinese about an AIG investment – even though his ties with Chinese leaders were broad and deep. But did he personally authorize any discussions, however tentative or exploratory? In addition, Paulson also insists that he knew the Chinese would want a federal guarantee, and that at the same time, they never explicitly sought one. How did he know any of this?

And let’s not forget the role of former AIG Chairman Maurice R. “Hank” Greenberg. His lawyer appears to have at least suggested that Paulson and the rest of the Bush administration should have let the Chinese in. Greenberg has successfully courted China’s most powerful leaders for decades, and has retained his influence through numerous leadership transitions in Beijing, both peaceful and otherwise. Did he encourage China to help rescue AIG? In other words, did he urge a foreign government that even then was often challenging or undermining U.S. national security interests to become a major power in the American financial system just to enrich himself personally?

These questions take on added importance given Greenberg’s major role in funding China and China-related programs in many of America’s most influential think tanks, including the Council on Foreign Relations.

It’s possible that the rest of the trial won’t shed significant news light on these questions – after all, that’s not the responsibility, much less focus, of either side’s lawyers. But further incidental revelations are entirely possible, and make the trial well worth following. The Paulson-Treasury-Greenberg-AIG-China nexus would be a great subject for a detailed Congressional probe. And is it too much to hope that Mainstream Media might want to dig into what could have been an eye-opening episode of corporate lobbying in Washington and foreign capitals?