Greenberg: 'I Don't Feel Any Responsibility At All'
From the Big Picture's Marion Maneker, this pointed response to Uncle Hank Greenberg's congressional appearance yesterday:
There seems to be a sad pattern developing among the formerly august financial figures of the passing generation. We’ve seen Alan Greenspan and Robert Rubin twist themselves into verbal pretzels in order to deny any responsibility for the current state of the financial system. Now, Maurice “Hank” Greenberg joins the fraternity of former titans unwilling to accept that they were present at the creation of our current destruction. From today’s Wall Street Journal we have this gem:
“I don’t feel any responsibility at all” for AIG’s problems, Mr. Greenberg said in the interview. “How can I be responsible for something that occurred when I’m not there?”
Mr. Greenberg remains a major shareholder in AIG, though the value of his holdings has declined by hundreds of millions of dollars since the start of 2008. Mr. Greenberg, who also controls a company that is AIG’s largest private shareholder, played down the impact of the stock’s slide on him personally.
“Of course, I lost considerable net worth,” said Mr. Greenberg, who also heads another firm, C.V. Starr & Co. “But I’m working. My life is not materially changed.”
Nice to hear that Greenberg hasn’t been inconvenienced. And it would be comforting to accept his version of events where the only problem with AIG was the lack of his steady hand on the tiller. See, this what you get for chasing him out of office and giving the job to a back-bencher like Martin Sullivan.
But Noam Scheiber does an excellent job of explaining two facets of Greenberg’s culpability. The first is that Greenberg presided over the growth and metamorphosis of AIG-FP into the dangerous threat that it would become after he left. It was Greenberg, after all, who put the infamous Cassano in charge of the division knowing that he required exceptional oversight.
But the second line of responsibility is more indirect. Cassano went off the rails when AIG lost its triple A credit rating eventually racking up huge bets on subprime mortgages to replace the easy money he was making exploiting AIG’s ratings arbitrage. One of the reasons Cassano was able to get so far off the reservation was that AIG’s management was pre-occupied with putting out the fires created by Greenberg’s aggressive actions, the ones that led to Spitzer’s pressure for Greenberg to step down. Here’s Scheiber:
