AIG CEO Robert Benmosche Says Government Officials Should Thank Him After Bailout

on October 22 2012 5:14 PM
AIG
The American International Group is considering whether to join a bailout lawsuit filed against the government after getting nearly $200 billion bailout in 2008. Reuters

Robert Benmosche, the CEO of American International Group, Inc. (NYSE:AIG), is a Randian who believes the solution to the financial crisis in Europe involves making people work until they’re 80, is still bitter Congress had the gall to question why employees in his bailed-out firm should have received multimillion-dollar bonuses in the midst of the financial crisis, and feels indignant that no one from the government said “thank you” to his firm when it was able to repay most of the emergency loan provided by Uncle Sam in 2008.

That’s the image that’s arising of the chief executive, 68-year-old Benmosche, which seems to have been unleashed from something of a media blackout following the repayment of AIG’s loans in September. He is the subject of a bombshell cover story by New York magazine this week.

In that story, Benmsoche is quoted as railing against what he believes is the view creeping into U.S. governing institutions that “there’s such a thing as a free lunch,” pointedly noting the AIG bailout “wasn’t a free lunch” but a loan.

“Everybody said it’s just not going to happen, they’ll never pay it off,” he told the magazine. “SIGTARP, Elizabeth Warren, Gretchen Whatshername [Morgenson] in the New York Times. The fact is we now have succeeded in getting the Fed back all of their money, and we’re just close to getting the Treasury paid back. And do you know, neither of them have ever said ‘Thank you’?”

Benmosche’s dislike for seeing himself or his company in debt to the government has been widely discussed ever since the executive came out of retirement in 2009 to take over the reins at AIG. In an early pep talk with employees, a tape of which was leaked to various financial media outlets at the time, Benmosche was heard belittling the aid given by the Treasury and insulting specific officials who had been critical of the firm.

It seems little has changed: In the article, the CEO gives a back-handed compliment to Treasury Secretary Tim Geithner, who was instrumental in approving the loans that saved his company, declaring: “God bless Tiny Tim.”

His main bone of contention, then as now, was that the government was acting foolishly in saying it was bailing out AIG because it saw value in the firm, but also wanting to destroy some of the firm’s value by punishing the people inside it.

“If it was up to the government, we wouldn’t be here today,” he said without a trace of irony. Benmosche repeated to New York his long-held position that the bonuses awarded AIG executives after the bailout were proper “because I worked harder.”

The executive admits in the magazine article his philosophy is influenced by the libertarian, ultra-capitalist tenets of novelist Ayn Rand. Earlier this year, Benmosche made some waves when he told Bloomberg News “retirement ages will have to move to 70, 80 years old” in the euro zone to solve the fiscal crisis facing some countries.

Not surprisingly, his comments are proving provocative.

“Once again, we are confronted with the breathtaking arrogance of a CEO who personally pocketed millions of dollars of taxpayer money and then asks us to thank him for doing us the favor,” Neil Barofsky, a former special inspector-general of the government’s TARP bailout, who is now promoting a book about his experience there, told the New York Post.

“AIG played a significant role in enabling the excesses that lead to the global financial crisis that cost Americans trillions of dollars. ...  Shame on Benmosche for forgetting that for one single moment.”

Coincidentally, as AIG’s CEO is going on a media tour nearly guaranteed to make him the face of the hated Wall Street plutocracy, the company itself is rebranding, giving its name to two subsidiary units and unveiling a “refreshed” logo

Even in that rebranding effort, Benmosche has inserted some self-aggrandizing politics, noting in early October that a new logo was meant to convey the fact that “AIG’s clients, investors, and the general public are increasingly recognizing that AIG has made America whole plus a profit.”

Whether AIG's repayment of its bailout loans and the sale of associated investments resulted in a profit for the government is debatable.

Shares of American International Group Inc. were down Monday on news the firm would be paying $11 million to settle a multistate lawsuit regarding overdue life insurance payments. Stock traded on the New York Stock Exchange closed the day at $35.53, down 17 cents, or 0.48 percent from the previous day’s close.

More News from IBT MEDIA