AIG decided late Wednesday to make the right common sense decision to pass on joining a shareholder lawsuit against the U.S. government, but it may not help the insurance giant shed its reputation as the poster company for Wall Street greed and chutzpah.

Pressured by lawmakers, regulators and taxpayers, the board of AIG said it would not join a lawsuit against the federal government over its $182 billion financial crisis bailout. The move followed several days of media coverage—and outrage—that it was considering joining a lawsuit filed by it former chief executive on behalf of fellow shareholders.

In an internal memo, obtained by The New York Times, sent late Wednesday to employees, AIG’s CEO said:

“The board’s decision today was about continuing to move this company forward, not backward. We as a company have kept our promise to return every dollar America invested in us, plus a substantial profit.”

But the damage has already been done. Following the initial news that AIG was considering joining the suit, The Washington Post covered the news in its “Wonkblog” under the headline: “AIG considers suing government for bailing it out, world implodes on itself.”

Legislators were incensed.

In a letter, Representatives Peter Welch of Vermont, Michael Capuano of Massachusetts, and Luis V. Gutierrez of Illinois wrote:

“AIG became the poster company for Wall Street greed, fiscal mismanagement, and executive bonuses—the taxpayer and economy be damned. Now, AIG apparently seeks to become the poster company for corporate ingratitude and chutzpah.”

Jon Stewart of Comedy Central aired a piece called, “AIG: Ingrateful Bastards.”

Plus, there’s the terrible timing of the news. It comes on the heels of a sweeping AIG branding campaign launched at the end of 2012.

The “Thank You America” campaign showcases its employees who tell AIG’s story. The ads are being featured during football games and news programs. The theme is how the company has repaid every dollar the government loaned to the company.

On its news Twitter account @AIG_LatestNews the company began late Wednesday sharing news of the board’s decision, trying to bring the conversation back to the campaign and pass off the latest news of considering the suit as simply a legal obligation.

And now AIG is back to square one in terms of rebuilding its reputation.

Gil Rudawsky heads up the crisis communication and issues management practice at GroundFloor Media in Denver. He is a former reporter and editor. Read his blog or contact him at grudawsky@groundfloormedia.com.