Hank Greenberg: Investigate the Goldman Cabal
Maurice (Hank) Greenberg is a billionaire and hardly a populist rabble rouser. But on a CNBC interview this morning he joined a lot of other voices in challenging the Federal bailout of banks and insurers engineered by Treasury Secretary Henry (also Hank) Paulson.
Greenberg is the former chief executive of American International Group and still its largest private shareholder. So he’s naturally miffed at current CEO Edward Liddy’s plan to split up and sell off what was once the world’s largest insurer — and at pennies on the dollar. Greenberg hinted broadly that there might be collusion between Paulson, the former head of investment bank Goldman Sachs, and Liddy, who once sat on the Goldman board while he was heading Allstate Corp., another insurer.
Greenberg, who was dethroned three years ago in the midst of an accounting scandal, suggested that AIG’s financial woes may have stemmed in part from paying off $38 billion in credit derivative swaps to counterparties at par — a sweet deal for the counterparties, who may have been investment banks like, uh, Goldman Sachs. Maybe Congress should look into that, he added.
Will anyone in Congress take Greenberg’s suggestion seriously when it returns in the new year? After all, Greenberg has himself been investigated by the U.S. Securities and Exchange Commission. But Congress — and the American people — aren’t very happy with the way banks are sitting on the money they’ve been given. And if there is an investigation, will it lead up the ladder to Goldman Sachs?
Ed Leefeldt is an award-winning investigative and business journalist who has worked for Reuters, Bloomberg and Dow Jones, and is the author of The Woman Who Rode the Wind, a novel about early flight.
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