Hank Greenberg: I Don't Run AIG

The bailed-out insurer's former CEO speaks out on a government report, the bailout and fraud charges that remain unsettled.
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NEW YORK (

TheStreet

) --

Hank Greenberg is speaking out against a congressional committee's report about

AIG's

(AIG) - Get Report

near-failure that characterizes the firm's former management and its government wards as inept.

"Obviously, I think it's totally wrong," Greenberg said on Monday in a phone interview. "In fact I think the 340-odd page report where Elizabeth Warren ... her comments are totally wrong."

Warren chairs the Congressional Oversight Panel, which last week issued

a report saying AIG's $182 billion taxpayer-funded bailout had "poisonous effect" on the market. But the report also seemed to cast a good deal of blame on Greenberg, who had led AIG for decades, but left the firm years before its current mess had exploded.

TheStreet

examined that element of the report in a story last week.

"I don't run the company and I haven't since March 2005," said Greenberg.

He went on to indicate that he believes AIG would have avoided its current mess if it had remained under his leadership. He indicated support for Charles Lucas, the former head of market risk, and Robert Lewis, who is in charge of credit risk and has received

digs in the media for remaining in place despite AIG's shoddy risk management practices in the time leading up to its bailout.

"We had the best risk-management division in place in the industry," Greenberg asserted.

The report referred to Greenberg as "the only person who fully understood the company's vast web of inter-relationships." Yet the former CEO says he only spoke with the committee for roughly an hour by phone ahead of the report's release.

He's now trying to meet with Warren to set the record straight, and provide his views on the bailout and what has transpired in the intervening time. Despite many pages of analysis, countless hearings and several investigations, Greenberg says all of it misses the point. He believes the government should have placed a guarantee on AIG's troubled financial-products unit -- a cheaper, quicker way to restore investor confidence than funneling cash into the entire corporation.

"I think the report itself ... misses a great deal of really what could have been done," said Greenberg. "... I think that clearly if the Fed owned mostly 80% of the company, they own the company, they control the company, then why didn't the feds just put a guarantee on FP

Financial Products?"

Instead, Greenberg points out that the government and AIG have taken a lot of heat for passing billions of dollars along to derivatives counterparties.

Among those that received 100-cent-on-the-dollar payments for deals gone awry were

Goldman Sachs

(GS) - Get Report

,

Citigroup

(C) - Get Report

,

Bank of America

(BAC) - Get Report

,

Morgan Stanley

(MS) - Get Report

, and foreign competitors like Société Générale,

Deutsche Bank

(DB) - Get Report

,

Credit Suisse

(CS) - Get Report

,

UBS

(UBS) - Get Report

and

Barclays

(BCS) - Get Report

.

Last week's congressional report also mentioned accounting fraud allegations that former Attorney General Eliott Spitzer filed against AIG, Greenberg and other managers in 2005. The

Securities and Exchange Commission

revisited the issue last year, but Greenberg notes that he hasn't settled any of the charges against him and issued a strong defense against the allegations on Monday.

"I really resent this idea that I was guilty with fraud," said Greenberg. "I never settled a goddamn thing about fraud."

Either way, the fraud charges didn't have much to do with the panel's report. When I mentioned that I didn't understand why the panel rehashed details of charges from Spitzer and the SEC, Greenberg responded: "I don't either and I'm pissed off about it."

Since Greenberg left, AIG has had four other CEOs: Martin Sullivan, Robert Willumstad, Edward Liddy and Robert Benmosche, the current chief executive. Sullivan had the position from the time Greenberg departed until a few months before the firm's bailout. Willumstad took over for a few months, before the government put Liddy in place.

>>>AIG CEOs, Past and Present

As far as AIG's current management, Greenberg said he has a good relationship with the current CEO, Bob Benmosche, whom he's known for years.

The former CEO of

MetLife

(MET) - Get Report

, Benmosche took over in August and has put the insurer on a steadier course, despite ongoing public backlash against compensation practices and the bailout in general. Under his stewardship, AIG has cut the federal tab from $182 billion to $70 billion, delivered better operating results, and has been executing plans to pay down more bailout money.

"I think he's an able manager," said Greenberg.

-- Written by Lauren Tara LaCapra in New York

.