The AIG Story
Maurice R. Greenberg, Lawrence A. Cunningham
The AIG Story first chronicles the origins of the company and its relentless pioneering of open markets everywhere in the world from 1970 to 2005. It then explores how the company faltered after it adopted a one-size-fits-all corporate governance structure that turned the company upside down and put it at the center of the 2008 financial crisis where the authorities seized upon it as both scapegoat and solution to the crisis. Produced based on a combination of co-author Hank Greenberg's personal involvement and the craftsmanship and objective writing of Professor Lawrence Cunningham, this book:
- Corrects common misconceptions about AIG that arose due to its role at the center of the financial crisis of 2008.
- Portrays one of the iconic businesses of the twentieth century which developed close relationships with many of the most important world leaders of the period and helped to open markets everywhere.
- Opens new critical perspective on battles with N. Y. Attorney General Eliot Spitzer and the 2008 U.S. government seizure of AIG amid the financial crisis.
- Shares confidential information publicly for the first time.
The AIG Story captures an impressive saga in business history--one of innovation, vision and leadership at a company that was almost destroyed with a few strokes of governmental pens. The AIG Story carries important lessons and implications for the U.S., especially its role in international affairs, its approach to business, its legal system and its handling of financial crises.
world. The Starr Foundation has also long supported the Asia Society, founded in 1956 by John D. Rockefeller III. It pursues the twin goals of increasing knowledge about Asia in the United States and about the United States in Asia. The Asia Society’s headquarters are in New York City, where the foundation helped finance the construction of its building. Similar interests inspired the Starr Foundation to support the Japan Society of New York, which Rockefeller reopened in 1952 after it had been
would deny being aware of this. If true, that underscores that a radical transformation had occurred, in which the new board and executives went through the motions of internal controls instead of insisting, as Greenberg had, on substantive accountability in fact. During Greenberg’s tenure, he would have learned of such a colossal matter promptly or else heads immediately would have rolled. Inexplicably, senior AIG management and some top FP executives later testified to being unaware, until July
Washington Examiner (April 8, 2009). 33. GAO Report (September 2011), 35–37; SIG-TARP Report, 6; see Wessel, In Fed We Trust,196–197. 34. Cunningham e-mail from Willumstad, July 23, 2012. 35. AIG press release, “AIG Signs Definitive Agreement with Federal Reserve Bank of New York for $85 Billion Credit Facility” (September 23, 2008); press release, “Edward Liddy Resigns from Goldman Sachs Board of Directors” (September 26, 2008). 36. Cunningham e-mail from Willumstad, July 23, 2012. 37.
AAA credit rating, made it trustworthy in capital markets. Counterparties would have justifiable confidence that AIG would pay its debts when due. Greenberg and Matthews believed that launching this product with Sosin was a strategic opportunity to put AIG’s AAA rating to profitable use. They invited Sosin back for another meeting to discuss more details, this time inviting along Dean Phypers, the chief financial officer of IBM who had been on AIG’s board since 1975, who had additional expertise
directors who had relationships with other beneficiaries of the Starr Foundation, including Feldstein, Holbrooke, and Zarb. 33. Zarb’s designation as lead director was formalized at an AIG board meeting of April 21, 2005, though his role was widely recognized to precede that formal designation. 34. Executive Order 13271, 67 Federal Register 46091 (2002), available at www.justice.gov/archive/dag/cftf/. President Obama replaced this with a Financial Fraud Enforcement Task Force. Executive Order