Thursday, December 24, 2009

Quite a set

At a reception shortly after he became chief executive officer of American International Group Inc., Robert Benmosche told a group of AIG executives that a part of his anatomy was bigger than the government's. His five-month tenure at the insurer is putting his swagger to the test.

That's the Benmosche I remember meeting at Metlife when he first joined: arrogant, as in having or showing feelings of unwarranted importance out of overbearing pride.

Overbearing fits, too.

Mr. Benmosche, more than any other leader of a bailed-out American company, has styled himself as a bulwark against government intrusion into the corner office. Although he sees his main mission as repaying roughly $87 billion in taxpayer money pumped into AIG, he doesn't want the government to tell him how to do his job.

He didn't want anyone telling him anything.

"Look, if you want me to come in here and just blow up the company, which is what you're doing, I'm not taking the job," Mr. Benmosche recalls telling government officials in New York and Washington when he was being screened.

Mr. Benmosche told government officials that he thought plans to quickly sell off assets to repay U.S. money were misguided. If you sell from weakness, you won't get good prices, he told them.

Good point. Selling from weakness is not good.

On his first day on the job, Mr. Benmosche met with senior managers at AIG's lower Manhattan headquarters. He exhorted them to come together to solve the company's problems, and said he didn't want to hear "whining and a lot of crying" about AIG's woes.

Also a good point.

He used the F-word liberally, prompting some executives to quietly tally up the number of times he used it, according to a person familiar with the situation. "I was aggressive in my language, but I was trying to set a tone that life will be different and some things are not negotiable," Mr. Benmosche says.

Who is this person who is always familiar with the situation? At any rate, he obviously used it for effect. And it isn't as if the executives had not heard, or used, it before.

In the ensuing weeks, Mr. Benmosche traveled around the nation meeting hundreds of AIG employees. In August, at a reception prior to a dinner with 20 or so executives at an AIG life-insurance unit in Houston, Mr. Benmosche said "my b -- are bigger than the government's," apparently to make the point that he wasn't easily intimidated, say two people familiar with the matter.

Sounds like him.

Mr. Benmosche says he doesn't recall saying such a thing. "If I said it, I would apologize, as it was not appropriate," he says, adding that sometimes "you have to be a little bit provocative if you're going to get people to believe in you and know you're not afraid."

There are different ways to express resolve and be provocative, and not all involve comparing the size of one's balls to the government's, or anyone else's. That sort of crude measure is a macho gesture that says more than the measurer realizes.

No one who is around Benmosche for a short while would presume him to be afraid of much anything, without his genitals being served up for assessment.

In late August, Mr. Benmosche made a previously scheduled trip to his vacation home and vineyard in Croatia. He showed off the sprawling property to several journalists, complaining at the same time about the demonization of AIG employees on Capitol Hill.

Around that time the name of AIG kept popping up as the financial crisis threatened to spiral out of control.

Around that time, some of the comments he made at employee meetings trickled out. Bloomberg News reported that he had said regulators were to blame for AIG's problems and that New York Attorney General Andrew Cuomo, who had demanded the names of AIG employees who received retention bonuses, should not be in office.

Blame the regulators; an old shill game. But Benmosche's political analysis was a brand new one.

James Millstein, the Treasury's point person on the AIG bailout, worried that the comments would undermine the company by reigniting populist anger. He called Mr. Benmosche in Croatia. "Bob, what are you doing?" Mr. Millstein asked.

"I got a bit into it and said a bunch of stupid things," Mr. Benmosche replied, saying he didn't realize the comments would become public. AIG issued a statement saying Mr. Benmosche regretted his remarks about Mr. Cuomo, who didn't end up releasing the names.

Ah, yes, the old Washington excuse, which Alex Rodriguez used so effectively: I was young, I was stupid, and I apologize. C'mon. An executive who got to Benmosche levels is not naive enough to believe pointed comments of one kind or another would not be leaked.

Dana Milbank wrote a book about the proliferation of apologies, Homo Politicus: the strange and barbaric tribes of the Beltway that simply fits perfectly. I took note of reading it, and of how it fit, beginning i March of 2008, and then through the political campaign.

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