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April 01, 2005

Goodbye Hank

Today's April Fool appears to be former AIG chairman and CEO, CEO Maurice R. "Hank" Greenberg.

Greenberg resigned his positions in recent weeks, amid a probe by regulators over charges of fraud at AIG, the world's largest business insurance company.

The future governor of New York (I pray), State Attorney General Eliot Spitzer, looks poised to indict the company, which joins the likes of Enron and Worldcom in a scandal involving accounting fraud. Last month, an internal audit showed the company had used improper accounting methods to falsely bolster its financial position as reported to the Securites Exchange Commission and, ultimately, its shareholders.

Now there are fun allegations that former chairman and CEO Maurice "Hank" Greenberg, who resigned in March, may have lied to regulators and investigators, and stolen or destroyed documents.

Greenberg was one of the most powerful executives in the world, and had been CEO of AIG since 1967, succeeding Cornelius Vander Starr, who founded the company in Shanghai in 1919. He was a big donor to the Republican party (was a Bush Ranger) and had sway with politicians from Washington to Beijing.

"The dramatic end of Mr. Greenberg's 37-year reign as head of the world's largest business insurance company was extraordinary for the financial titan who ruled AIG as a personal fiefdom," wrote The Wall Street Journal this morning. "Indeed, as the events unfolded, Mr. Greenberg railed against what he viewed as a palace coup...He called and yelled at several directors, including longtime friends Frank Zarb, former chairman of the National Association of Securities Dealers... for "turning" on him and leading a "boardroom revolt," the people say. Shortly after the probe began, he complained about the "McCarthy-istic" legal and regulatory atmosphere that he believed attacked him unfairly, the people say...For decades, the health-conscious chief roamed AIG's corporate headquarters and many of its offices around the world...In his executive suite filled with Chinese artifacts, Mr. Greenberg had his own elevator guarded by his own security detail, his own living room adjoining his office and private chandeliered dining room.

Basically, Hank Greenberg is Mr. Burns from "The Simpsons" (who, of course was fashioned after John D. Rockefeller). It figures that he has finally been unmasked as the crook he is. I worked for AIG for a few years and, you know, I never trusted that mofo. (You can learn why http://www.culturefreak.com/barrons.html#aigscandal and here, at your leisure.) A couple of times I encountered his personal security detail mentioned above, which guarded the entire 18th floor of the company headquarters at 70 Pine St. in lower Manhattan. That scene was right out of the pages of "Robocop" or "Brazil."

I'd laugh more at AIG's misfortune if I weren'ta shareholder. AIG stock is, in fact, the last security investment I still have (the dot com burst took care of my 401Ks). What sucks is, recently I dumped my General Motors stock, because the word was that GM was gonna tank. It did tank, but luckily after I cashed out directly, using the stock's transfer agent. I wanted to cash out my AIG stock also, but couldn't get it together. Now, in less than two weeks, it's fallen from $70-something a share to $50-something.

In recent months, I've been editing a book on accounting fraud investigations, and so the whole question of corporate governance has been fresh in my mind, back from the dead after the whole Iraq-war interruption. With this in mind, I've decided to post an editorial I wrote on the subject, almost three years ago.

Posted by MJuhre at 04:35 PM | Comments (0)

Goodbye Randal Terry

For the left-of-center political strategists in America's ongoing culture war, Pope John Paul II could not have picked a better day to die (or, at least, fall deathly ill — the reports keep changing).

Before I go on, let me say I intend no disrespect to the Pontiff (seriously). But this isn't about him. This is about the American culture war whose most recent battle took place was in a hospice in Florida and (as always) on the television airwaves.

That the Pope's health failed on this, of all days, is a blow to Randall Terry and others who recently used poor Terry Schiavo to further their anti-American goals.

For weeks the these people—who seek destroy the American traditions of pluralism, separation of powers, checks and balances, and the very rule of law in the United States based solely on their personal religious beliefs—have received a media buzz that generated yet another polarizing issue in America's culture war.

The full political and cultural fallout from the Terry Schiavo situation will surely go on, and perhaps has barely begun, but let's face it: the minute Terry Schiavo died yesterday, the news media, particularly the cable news channels, were looking for a new story.

Boy did they get it. These mothers swept down on the Pope so fast that, as with Yasser Arafat, they prematurely reported his death.

Sure, the TV news will continue to report on issues brought forth by the Terry Schiavo story. Indeed the story of the Pope's death, or impending death (“... uh...well we assure you he is very very sick, according to the Vatican”), will be intertwined with that of Schiavo, since her death sparked a debate on life, and end-of-life issues of which the Pope had strong feelings.

But, Schiavo's death ended the suspense required for the drama of 21st-century television news. Our attention-deficit-disorder-driven media outlets ready to move on to the next big thing. The Pope came and saved them.

Posted by MJuhre at 03:53 PM | Comments (0)