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A self-serving portrait of AIG's Maurice 'Hank' Greenberg

"The AIG Story" combines the stiffness of a corporate report with the ludicrousness of a dictator's hagiography. It's a pity, because the events are fascinating.

February 22, 2013|By John Gapper
  • Maurice “Hank” Greenberg took the helm of AIG in 1967 and was kicked out by his board in 2005.
Maurice “Hank” Greenberg took the helm of AIG in 1967 and was… (Gerald Herbert, Associated…)

In 1984, while flying at 43,000 feet, both engines on American International Group's corporate jet failed. The pilot "calmly but quickly" conferred on which airport he should try to reach with Maurice "Hank" Greenberg, AIG's chief executive. (One engine later restarted, ending the crisis.)

If it is unclear to you why a pilot should take advice on how to tackle an air emergency from the head of an insurance company, you clearly don't know Greenberg, who took the helm of AIG in 1967 and was kicked out by his board in 2005. The Greenberg of "The AIG Story," published by Wiley, is a cross between Henry Ford, Henry Kissinger and James Bond.

When some ski gondolas come loose on a Vermont mountain that he later turns into "one of America's leading resorts," he skis down "to warn others and prevent injuries." When the president of Romania asks him about U.S. ballistic missiles, it turns out that this is "the kind of topic that Greenberg thought about often and understood."

When he flies to Vietnam after a hotel fire in Ho Chi Minh City, "the victims and their families [are] moved by Greenberg's presence." He selects where to put the ashes of Cornelius Vander Starr, the founder of AIG, and builds an 18-hole golf course at his mentor's country house "in response to requests from guests."

When he informs Mikhail Gorbachev he has "just arrived here in Russia from America on a corporate jet. Which system is better, the Soviet or the American?" the former president of the Soviet Union turns and walks away. The authors interpret this as Gorbachev being unable to acknowledge the truth in public. Here's another idea: Gorbachev found his visitor insufferably rude.

The Renaissance man meets his nemesis in Eliot Spitzer, the former New York attorney general (and later governor), who accuses AIG of being "a black box run with an iron fist by a CEO who did not tell the public the truth." Three years later, Greenberg has to watch as his company is taken over and dismantled by the U.S. government in the financial crisis.

The problem with this book, co-written by 87-year-old Greenberg and Lawrence A. Cunningham, a law professor at George Washington University, is that by the time we get to their version of these epic events they have lost credibility. Their story combines the stiffness of a corporate annual report with the ludicrousness of a communist dictator's hagiography.

It is a shame because the story of how Greenberg built AIG after Starr's death is fascinating, and his monumental egotism clearly served the same purpose as, for example, Steve Jobs' dominance of Apple. The strongmen who ruled what became the "emerging markets" found they could do business with this restless, ruthless corporate dictator.

The point, if there is one beyond settling scores, is to contrast his dictatorial approach with the shareholders' rights movement and shift toward independent boards. The moral: Under the former, AIG thrived; under the latter, it collapsed.

It is a provocative idea, but our narrators seem so unreliable that their version is hard to take seriously. Greenberg is a master of detail — except for the one deal that dooms him. "He might have spent a total of 15 or 20 minutes on the entire transaction" after "some colleagues indicated a slight reduction in the level of reserves, by about $59 million." Hardly worth concentrating on, really.

He is barred from AIG's headquarters and denied access to personal material including letters from his mother "and medical files for his dog, Snowball." Corporate governance do-gooders and bureaucrats take his place, and AIG's derivatives division is let off the "short leash" on which he kept it — and presumably Snowball.

Greenberg was a tough, brilliant, inventive business leader. As an autobiographer, he could try harder.

John Gapper is chief business commentator of the Financial Times of London, in which this review first appeared.

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