Greenberg: I'm Not Poaching From AIG

Author: Liz Moyer

A report on Tuesday says he's making a run at his former company. Nonsense, he says.
 
Maurice "Hank" Greenberg didn't get the memo about how he's supposed to retreat to a secret lair and just ... retire ... already, but that doesn't mean he's trying to kill American International Group.

In fact, the 84-year-old insurance executive said in a statement Tuesday issued by his firm C.V. Starr that if the government had listened to him, AIG ( AIG - news - people ) might not be in the mess it's in now, facing further exodus of the executive talent needed to stay and run the place so the taxpayers can recoup their $130 billion loan, er, investment.

The statement is in response to a front-page story in Tuesday's New York Times that depicts the former AIG chief executive as poaching talent away to C.V. Starr to make a run at the global property and casualty insurance business that made AIG a global powerhouse.

AIG, under supervision by the government and now subject to strict executive compensation standards by the pay czar, isn't the fun workplace it used to be, which is making a lot of employees jump ship. And it's not like C.V. Star is the only one benefiting--they only got 13 of them.

According to a Bloomberg story in August, 49 AIG managers have jumped ship to rivals, including Ace Ltd (incidentally, run by Greenberg's son Evan) and Zurich International, in the last year, despite a $1 billion fund set aside to try and retain them.

"Over the last year, we understand that a number of AIG's 100,000-plus employees have left AIG to join the company's direct competitors in the global property and casualty and life insurance businesses. Only 13 of those employees have joined C.V. Starr&Co., Inc., which was formed in 1950 and focuses on highly specialized insurance lines; far more, we believe, have joined other, larger companies," the C.V. Star statement said.

An AIG spokesman said the company wasn't commenting.

Greenberg has been at war with his once-beloved AIG since former New York Attorney General Eliot Spitzer drove him out in a 2005 accounting scandal. AIG was brought down by credit derivatives sold through its financial products division. The market bubble for these products occurred after Greenberg left the company and is largely the reason why Greenberg has escaped direct blame for the state of AIG. Indeed, Greenberg blames the downfall on mismanagement by his successors.

He did settle a civil securities violation charge related to the accounting scandal with the Securities and Exchange Commission during the summer, paying $15 million.

At the same time he fought AIG over $4 million worth of AIG stock and won. AIG had argued that he improperly cashed out the stock to finance new ventures to compete with AIG.

Greenberg has spent the last year trying to browbeat the government into listening to his ideas about how to rescue AIG. A plan to repay the taxpayer bailout funds by selling key assets isn't going to work in the current economy, he says. More shocking was the $50 billion cash paid to derivatives counterparties to make them whole, including big banks like Goldman Sachs ( GS - news - people ), Greenberg contends.

Instead the government should rely on guarantees, long-term government funded debt and third-party capital (like maybe those credit derivatives counterparties, or even, [clears throat], him?) to bring AIG out of its crisis.

"The reason that employees are leaving AIG has less to do with these other companies, and more to do with the current approach to AIG, which is unlikely to result in the repayment of the American taxpayer," Greenberg said Tuesday.