WASHINGTON (Bloomberg) — The inspector general of the Troubled Asset Relief Programme said the Treasury Department's reduced estimate of losses from the bailout of American International Group Inc. gives the appearance that the US is manipulating information for a public-relations gain.

"It leaves them vulnerable to criticism that they're just manipulating the numbers for a big PR push," Neil Barofsky, special inspector general for TARP, said in an interview yesterday with Betty Liu on "In the Loop" on Bloomberg Television.

Barofsky said in a report yesterday that the method Treasury used to project a $5 billion loss from its investment in AIG differs from that used in a loss estimate of $45.2 billion from March.

"While AIG's fortune may have indeed improved during the course of those six months, there is a serious question over how much of this decrease comes from a change in Treasury's methodology for calculating the loss as opposed to AIG's improved prospects," Barofsky said in his report.

AIG, once the world's largest insurer, turned over a majority stake to the US in 2008 as part of a rescue that grew to $182.3 billion. The exit plan converts the government's preferred stock into 1.66 billion common shares for sale on the open market and taps a Treasury rescue fund for as much as $22 billion.

Barofsky's comment on manipulating the numbers is "pure nonsense", Treasury spokesman Mark Paustenbach said in an e- mail yesterday. "Our calculations on AIG are straightforward, and we have published this for all Americans to see. After the restructuring, we'll own 1.65 billion shares of the company, and those shares have a readily identifiable price on the New York Stock Exchange. Anyone capable of basic multiplication can do the math."