NEW YORK (MarketWatch) -- American International Group Inc. is a pariah among pariahs for atrocious decisions made after the government stepped in with $180 billion in cash and guarantees.

The depth of this black hole of the financial landscape reached a new low Thursday. AIG (AIG) tapped Deutsche Bank AG (DB) and Morgan Stanley (MS) to underwrite what is expected to be a $5 billion initial public offering for American International Assuance Co., the Asian life insurance unit that AIG is spinning off to raise cash.

The AIA deal will be a cash bonanza for the underwriters potentially reaping hundreds of millions of dollars in fees, according to The Wall Street Journal. Deutsche Bank also among the banks made whole on credit default swap payments funded by the government bailout.

There is nothing wrong with banks being paid fees to provide services. In this case selling a life insurer with $60 billion in assets -- which couldn't be sold in the open market -- will not be a layup with investors.


But many believe the government's 80% stake in AIG ultimately will be difficult to unwind or recoup. Were AIG left to liquidation, investment banks still would have earned fees as assets were sold to pay claims. But taxpayers, arguably, would not have had to foot the bill.

AIA is hardly the last piece of AIG to be sold or disposed of. That means intense scrutiny on where the insurer spends its, or our, money.

Even more than spending on sports sponsorships, public relations, advertising and junkets, spending to other Wall Street pariahs is hard for us to swallow.