He said he initially turned down the AIG job because of the lambasting that his predecessor, Liddy, had received during congressional hearings in March and May 2009 regarding employee bonuses.
“I wasn’t interested in this job, I’ve got to tell you, I said ‘no’ three times,” Benmosche told staff at an August 2009 meeting. “I said to all the key people in Washington I met over the last two weeks, ‘Why in God’s name would you want me to be your CEO? I’m angry about everything you did. There isn’t anything you did right.’”
One reason he took the AIG post was to help restore confidence in the insurance industry, Benmosche told staff.
“It affects me personally because, quite frankly, I still got a lot of MetLife stock,” he said. “And if I can improve everything here, I can make some money here, and I can make a lot of money there, too. And then I can add more vineyards.”
Biggest Loss
In 2008, AIG reported the biggest quarterly loss in U.S. corporate history and posted almost $100 billion in net losses that year, fueled by bets on subprime-mortgage securities. AIG was deemed by the Treasury Department a “systemically significant failing institution” and was the only company to receive bailout funds through a facility created for such firms.
Federal Reserve Chairman Ben S. Bernanke said AIG’s bailout, a day after the failure of Lehman Brothers Holdings Inc., had made him “more angry” than any other episode in the financial crisis. The business was akin to a hedge fund “attached to a large and stable insurance company,” Bernanke said.
In his first month at AIG, Benmosche drew criticism for vacationing in Croatia. In a town hall meeting with AIG staff that month, Benmosche spoke of ridding AIG of government oversight.
Bailed-out firms have to “start rebuilding themselves, without government regulation, government control, government decisions on how you pay people,” Benmosche said. “If we do it the right way, I’m convinced we can restore credibility in our industry, as well as for our country.”
Washington ‘Crazies’