Former AIG CEO Criticizes Successors, Bailout

Former AIG CEO Criticizes Successors, Bailout - 4/2/2009

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Former AIG CEO Criticizes Successors, Bailout
Staff Writer - Associated Press

Los Angeles Times. April 2, 2009
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EXCERPT: The man who built insurance giant American International Group Inc. from a startup to a global behemoth said he didn't mismanage the company -- but the government did. Following weeks of public and congressional outrage over largest corporate failure in U.S. history, Maurice "Hank" Greenberg, AIG's chief executive until March 2005, said taxpayers got a raw deal in the largest bailout of the financial crisis. In his first testimony since the government stepped in with four bailouts for AIG, Greenberg told the House Oversight and Government Reform Committee Thursday that his leadership team had "nothing to do" with failures that so far have cost taxpayers more than $182 billion. But he spread blame generously across virtually every other party involved in the company and its rescue -- including subsequent management, federal regulators and ratings agencies. An AIG spokesman disputed Greenberg's claims and lawmakers questioned the truthfulness of his testimony. Since taking over the company, the government has left taxpayers with a nearly 80% stake "in a steadily diminishing asset" and no good exit strategy, Greenberg said. The 83-year-old said he never would have made the disastrous decision to sell hundreds of billions of dollars in guarantees for corporate and consumer debt. "When I left the company, it was a healthy company," Greenberg said, citing its strong earnings and share price at the time. He did not discuss liabilities AIG was accumulating on its balance sheet through derivatives and a securities lending business. Greenberg blamed his successors for all of New York City-based AIG's problems. He said they recklessly abandoned "comprehensive and conservative" risk management procedures that he and his executive team employed.

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