Saddled with the mission of fixing American International Group Inc. (NYSE:AIG) after its first bailout, the insurer's CEO Edward Liddy is busy defending the latest bailout and pinning the blame on his predecessors.
While promising on Bloomberg Television Monday
morning that
every penny of the $180 billion
in government funds would be paid back, Liddy laid the blame for the company's dismal condition
squarely at the feet of Hank Greenberg, the man who built AIG
into the world's largest insurer.
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Liddy told
Bloomberg:
"The formation of the AIGFP unit, which has literally brought us to our
knees, that happened on his watch. The compensation systems that have
gone astray happened on his watch. I don't think it's as clean and
simple as sometimes Hank would like to portray."
Founded in 1987, the AIG Financial Products Corp. unit that Liddy alluded to is a large issuer of credit default swaps. Its status
as a large counterparty is one of the main reasons AIG has received
repeated bailouts, making it both a blessing and a curse -- as its existence helps drag the company down, while at the same time making it necessary that it be saved.
For his part, Greenberg has loudly lamented the fall of AIG and
advocates rebuilding it, as opposed to the current dismemberment. He has vigorously tried to either return to right the company himself or to buy major
pieces of the company; however, all of his efforts have turned to naught thus
far. -
George White
See Bloomberg story
See Deal Pipeline story on AIG bailout
See Dealscape post on Greenberg
