Uncategorized · October 16, 2008

AIA and Greenberg

After the government intervention is announced, Greenberg sits down with Fortune for an interview, seeming years older than he did just a month ago in Switzerland, and tired. He is a multibillionaire no more. He and Corinne’s AIG shares are worth around $113 million. He is adamant that he bears no responsibility for the current crisis and is convinced that if he had been at the helm, the company would still be strong. He says he would have pulled out of the CDO business long ago and never would have done so many transactions.

Much dust will have to settle before the role played by Greenberg – and many others – in the current financial crisis can be fairly judged. Greenberg certainly had a hand in his own company’s demise and is still facing government and private litigation. His view of his own responsibility is entirely without nuance. He says that his biggest error was selecting directors and a successor without backbones. “The biggest disappointment you have in life is in people. To have them act the way they did goes beyond disappointment – it goes to the question of character and courage.” Over his favorite meal, baked scrod with almonds, he says, “I’ve lived a pretty good life. I served my country. I raised a good family. I had the privilege of meeting Mr. Starr.”

But the past several years have been difficult. “What makes it even more painful is this,” he says: “It took 40 years for a group of people who worked together to build this. It was like a band of brothers. And then you look at it three and a half years later, and the company is on the rocks. You see what can be undone in a brief period of time. Never in my wildest dreams did I imagine this could happen at AIG.

“So is it painful?” Greenberg asks. His blue eyes are bright and moist. “Yeah. Bitterly painful.”