Interview with Hank Greenberg: "Can AIG Be Saved? " (AIG; GS)

From the weekend Wall Street Journal:

Goldman Sachs has a new enemy—as if it needed another one.

Hank Greenberg, as we sit in his Park Avenue office, is telling me how to do my job, saying reporters need to get to the bottom of the events that preceded and followed the government bailout of AIG, the insurance company he built into a global giant.

In particular, they need to get to the bottom of the part played by the investment bank of Goldman Sachs. He waves a sheaf of press reports from the New York Times, Washington Post and McClatchy papers about the firm's doings before and during the subprime meltdown. "We're dealing with a jigsaw puzzle where all the pieces are not in the box. Bit by bit, we're getting the pieces. The pieces are failing into place and the picture on the face of the puzzle is not a pretty picture."

Let me get this straight. Is Mr. Greenberg saying the machinations of Goldman Sachs were responsible for the disastrous failure of AIG amid the recent financial crisis? "Well, it certainly wouldn't be difficult to come to that conclusion."

Until a few years ago, Mr. Greenberg was enjoying a stellar career as an insurance CEO, but not a melodramatic one. That all changed in 2005 when he became one of several business titans turned into unwilling stepping stones for the advancement of an ambitious New York attorney general named Eliot Spitzer.

Mr. Greenberg, a genuine captain of industry but little known to the public, had built AIG over 30 years to become the biggest and most admired company in the global insurance industry. Then Mr. Spitzer, riding a wave of righteous distrust of business after Enron, accused him and AIG of accounting fraud. Mr. Spitzer, on national television, pronounced Mr. Greenberg guilty even before any evidence had been presented to a jury.

AIG was on the rack, its business about to be destroyed if Mr. Spitzer criminally indicted the firm. So the board jettisoned its long-serving chief to appease the crusading attorney general. Mr. Greenberg, at age 80, settled in for what he must have known would be a long siege of lawsuits and regulatory investigations to occupy his declining years. He couldn't have anticipated, though, that the drama of his non-retirement was only just beginning and would lead to a fight in which something even bigger than his reputation would be at stake—the very survival of the firm he'd built and been ousted from....MORE