<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Ex-AIG chief washes his hands of debacle
</TR><!-- headline one : end --><TR>Greenberg tells stunned committee that he left AIG in a healthy state </TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
</TD><TD vAlign=bottom>
Mr Greenberg claimed that he had left AIG in a healthy state. -- PHOTO: REUTERS
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WASHINGTON: For a man whose company is synonymous with the collapse of the world economy, Mr Hank Greenberg has remarkably clean hands.
The former AIG chairman went before a congressional committee on Thursday to declare that he is utterly blameless - a claim that requires ignoring the fact that his company created the financial instruments that caused the loss of trillions, the ruin of millions and a government bailout in the hundreds of billions.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>NOT MY FAULT
'Nothing to do with me whatever.'
Former AIG chairman Hank Greenberg, when asked if he accepted any responsibility for the events leading up to AIG's debt rating being downgraded, which precipitated the collapse of the world economy
</TD></TR></TBODY></TABLE>'The massive losses at AIGFP' - the AIG unit that developed the catastrophic credit default swaps - 'resulted significantly from a shift in the way the unit did business after I left the company in the spring of 2004,' Mr Greenberg argued.
Actually, it was the spring of 2005 that the AIG board ousted Mr Greenberg because of a federal fraud investigation that led the company to restate years of earnings - but facts did not clutter his narrative.
'Let me be clear,' he said. 'AIG's business model did not fail. Its management did.' Members of the House oversight committee were stunned by the self-exoneration.
'When you refer to management, are you including yourself in that category?' asked Representative Elijah Cummings.
'No,' Mr Greenberg answered without hesitation. 'When I left the company, it was a healthy company....We had no problems.'
Mr Cummings pointed out that just one day after Mr Greenberg left, AIG's debt rating was downgraded - the event that precipitated the unravelling - 'as a result of the failures that occurred on your watch'.
'Do you accept any responsibility at all for the events leading up to that critical moment?' Mr Cummings asked.
'No, I don't,' Mr Greenberg replied. 'Nothing to do with me whatever.'
Mr Greenberg may have a curious sense of history, but his timing is excellent. He left AIG just months before it became obvious that the credit-default swaps - particularly those linked to sub-prime mortgages - were becoming a major problem. Likewise, he came to town two weeks after the rage over AIG bonuses died down, resulting in a much gentler reception than that for Mr Edward Liddy, the man brought in to clean up the mess, last month when he appeared before a different committee.
Mr Greenberg, 83, took an early opportunity to mention a recent bout with pneumonia and spoke so softly that lawmakers strained to hear his opening statement, in which he blamed his successors in AIG management (who, it so happens, were the same people who had been working under him).
'Who's responsible for the fall of AIG?' asked the committee chairman, Mr Edolphus Towns.
'Clearly, the successor management has to be charged with that,' the witness replied.
'What you failed to mention is that a good portion of those risky bets occurred while you were still at the helm of AIG,' Mr Cummings needled. 'How many of those swaps were issued under your leadership?'
'I can't give you the answer sitting here right now,' Mr Greenberg demurred. He also said that the government's US$170 billion (S$255 billion) bailout had failed and taxpayers would have been better off letting the company go bankrupt.
He immediately found himself in a bitter long-distance fight with AIG's current government-installed management. Even as he was testifying, AIG accused him of playing a central role in AIG Financial Products, the unit that caused the company's collapse last year.
'Hank Greenberg continues to deny his role in allowing FP to write the multisector credit-default swaps which sowed the seeds for AIG's troubles,' the company said. It also denounced Mr Greenberg as evading questions and lacking credibility as a business strategist.
'He refuses to acknowledge that he approved entry into the credit default swap business, approved more than US$40 billion of swaps written on CDOs containing sub-prime loans, and didn't hedge or put up reserves against them,' AIG said. Collateralised debt obligations (CDOs) are securities made from pools of loans and other forms of debt.
'We don't understand how he can be viewed as having any credibility on any AIG issue.' NEW YORK TIMES
</TR><!-- headline one : end --><TR>Greenberg tells stunned committee that he left AIG in a healthy state </TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Mr Greenberg claimed that he had left AIG in a healthy state. -- PHOTO: REUTERS
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WASHINGTON: For a man whose company is synonymous with the collapse of the world economy, Mr Hank Greenberg has remarkably clean hands.
The former AIG chairman went before a congressional committee on Thursday to declare that he is utterly blameless - a claim that requires ignoring the fact that his company created the financial instruments that caused the loss of trillions, the ruin of millions and a government bailout in the hundreds of billions.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>NOT MY FAULT
'Nothing to do with me whatever.'
Former AIG chairman Hank Greenberg, when asked if he accepted any responsibility for the events leading up to AIG's debt rating being downgraded, which precipitated the collapse of the world economy
</TD></TR></TBODY></TABLE>'The massive losses at AIGFP' - the AIG unit that developed the catastrophic credit default swaps - 'resulted significantly from a shift in the way the unit did business after I left the company in the spring of 2004,' Mr Greenberg argued.
Actually, it was the spring of 2005 that the AIG board ousted Mr Greenberg because of a federal fraud investigation that led the company to restate years of earnings - but facts did not clutter his narrative.
'Let me be clear,' he said. 'AIG's business model did not fail. Its management did.' Members of the House oversight committee were stunned by the self-exoneration.
'When you refer to management, are you including yourself in that category?' asked Representative Elijah Cummings.
'No,' Mr Greenberg answered without hesitation. 'When I left the company, it was a healthy company....We had no problems.'
Mr Cummings pointed out that just one day after Mr Greenberg left, AIG's debt rating was downgraded - the event that precipitated the unravelling - 'as a result of the failures that occurred on your watch'.
'Do you accept any responsibility at all for the events leading up to that critical moment?' Mr Cummings asked.
'No, I don't,' Mr Greenberg replied. 'Nothing to do with me whatever.'
Mr Greenberg may have a curious sense of history, but his timing is excellent. He left AIG just months before it became obvious that the credit-default swaps - particularly those linked to sub-prime mortgages - were becoming a major problem. Likewise, he came to town two weeks after the rage over AIG bonuses died down, resulting in a much gentler reception than that for Mr Edward Liddy, the man brought in to clean up the mess, last month when he appeared before a different committee.
Mr Greenberg, 83, took an early opportunity to mention a recent bout with pneumonia and spoke so softly that lawmakers strained to hear his opening statement, in which he blamed his successors in AIG management (who, it so happens, were the same people who had been working under him).
'Who's responsible for the fall of AIG?' asked the committee chairman, Mr Edolphus Towns.
'Clearly, the successor management has to be charged with that,' the witness replied.
'What you failed to mention is that a good portion of those risky bets occurred while you were still at the helm of AIG,' Mr Cummings needled. 'How many of those swaps were issued under your leadership?'
'I can't give you the answer sitting here right now,' Mr Greenberg demurred. He also said that the government's US$170 billion (S$255 billion) bailout had failed and taxpayers would have been better off letting the company go bankrupt.
He immediately found himself in a bitter long-distance fight with AIG's current government-installed management. Even as he was testifying, AIG accused him of playing a central role in AIG Financial Products, the unit that caused the company's collapse last year.
'Hank Greenberg continues to deny his role in allowing FP to write the multisector credit-default swaps which sowed the seeds for AIG's troubles,' the company said. It also denounced Mr Greenberg as evading questions and lacking credibility as a business strategist.
'He refuses to acknowledge that he approved entry into the credit default swap business, approved more than US$40 billion of swaps written on CDOs containing sub-prime loans, and didn't hedge or put up reserves against them,' AIG said. Collateralised debt obligations (CDOs) are securities made from pools of loans and other forms of debt.
'We don't understand how he can be viewed as having any credibility on any AIG issue.' NEW YORK TIMES
