Greenberg rejects blame in AIG mess
WASHINGTON - The man who built American International Group from a start-up to a global behemoth said he didn't mismanage the company - but the government did.
Following weeks of public outrage over the largest corporate failure in US history, Maurice "Hank" Greenberg, AIG's chief executive until March 2005, said taxpayers got a raw deal.
Greenberg told the House Oversight and Government Reform Committee yesterday that his leadership team had "nothing to do" with failures that 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 percent 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 AIG's problems. He said they recklessly abandoned "comprehensive and conservative" risk management procedures that he and his executive team employed.
"AIG's business model did not fail; its management did," Greenberg said. He went on to criticize their handling of the financial products division, which he said "functioned quite well" under his leadership.
That division wrote the credit-default swaps that have forced AIG to pay more than $50 billion to US and foreign banks. Greenberg said the payments never should have been made.