AP Business Writer
NEW YORK (AP) -- Four and a half years after insurance giant AIG collapsed, leading to the biggest bailout of the financial crisis, former CEO Hank Greenberg has one message: Don't blame me.
Greenberg is the man who spent nearly four decades building AIG into a global insurance power. AIG is the company that nearly collapsed under the weight of toxic mortgage securities and insurance contracts and had to be rescued by the government.
In a new book, "The AIG Story," Greenberg faults others for those failures. In his version of the company's history, he's a hero and a victim.
Greenberg was gone by the time AIG nearly failed in 2008, having been pushed out three years earlier during government investigations into accounting irregularities. He blames his successors for the company's implosion and scoffs at any suggestion that he might have created the conditions for it.
In his book, which he co-wrote with George Washington University professor Lawrence Cunningham, he paints himself as a sort of superman of business, politics and relationships. He bans the three-martini lunch popular among executives. He delves into new business endeavors, like insurance against kidnapping. At a resort, he skis down a mountain to warn other executives that the gondolas have come loose. He meets Mikhail Gorbachev and argues so winningly for capitalism that Gorbachev "turns and walks away."
Greenberg lost his job in 2005, when AIG's board forced him out after New York's attorney general, Eliot Spitzer, accused the company of accounting irregularities. Greenberg denies he did anything wrong. He says he was removed by paranoid directors who cared more about themselves than the company.
In an interview with the Associated Press at his Park Avenue office in Manhattan, Greenberg, 87, criticized new banking regulations and explained why he's suing the government for $25 billion. Questions and answers have been edited for clarity and length.
Q. What do you think of the current era of financial regulation?
Look, I think Dodd-Frank was a mistake when they enacted it. Virtually none of the committees who are investigating what happened have reported their findings, so it's like shooting, then aiming afterward. And it's going to hurt our economy. It's going to hurt growth. That doesn't mean you don't need regulation. You need enlightened regulation.
After (the collapse of) Enron, the pendulum swung in one direction. Boards of directors gained more power over companies, over management. Boards can't run companies. You minimize the importance of the CEO and the senior management and you've essentially disabled the company.
Q. Isn't the board supposed to stand up for shareholders?
The board's also supposed to stand up for management.
Q. Are you saying that everything bad at the company happened in the three and a half years after you left? Nothing happened while you were in charge that set it up for its near failure?
Yeah. You tell me what happened when I was there that made it bad.
Q. But the company's Financial Products division, which wrote the credit-default swaps that forced AIG to be bailed out, was created while you were CEO.
It was there and made a profit every year. We made millions of dollars in AIG Financial Products.
Q. But it was fined by the Securities and Exchange Commission in 2004, and that was when you were still in charge.
In the era that we were in (post-Enron), the board of directors were very sensitive and didn't want to put up a defense against anything. The lawyers who represented us in Washington said we would not have (had) a problem winning this case, OK? It had nothing to do with anything.
Q. A lot of your book focuses on the end of your tenure. You said you had board members who were taking up your time with "questions on matters beyond their competence."
After Enron, as I said, boards became more defensive. They were more interested in their own responsibility or liability than they were in the company.
Q. Don't you want people on your board asking you tough questions?
Listen, asking questions is not the issue. When you have boards telling management how to run the company, then you have a problem. You have to look at history. (AIG) did pretty well. Became the largest insurance company in history. It wasn't an accident. Why don't you focus on that? (It was when) the board became more intrusive and began to not worry about the results of the company but their own responsibility and liability that AIG got into trouble.