An insider’s account of the astounding rise and stunning collapse of AIG and its legendary CEO

In September 2008, AIG was forced to declare bankruptcy, three years after its charismatic leader, Hank Greenberg, was forced out of the company on charges of accounting manipulation. This book captures the unprecedented downfall of a much-revered and celebrated business leader that also paralleled the collapse of a financial powerhouse. Ron Shelp reported to Greenberg for 12 years, in a variety of roles at AIG. He also had access to top AIG executives, including his former boss Greenberg, and Greenberg’s nemesis, Eliot Spitzer, the crusading Attorney-General of New York who brought about Greenberg’s eventual downfall.

The author follows the story of global insurance giant AIG from its humble beginnings, in China in 1929, right up to the ousting of its CEO, of 40 long years. He draws on his many years of experience at AIG to paint a portrait of the business acumen and shrewdness of Greenberg and the international political intrigue that shaped AIG. Greenberg essentially created AIG through his intense political involvement, penchant for playing hardball and imposing his own rules.

In the nearly four decades at the helm of AIG, he transformed the modest insurance company into the world’s largest insurer, among the top 10 Fortune 500 companies. Greenberg was an archetypal autocrat, excelling at manipulating situations to his advantage and exacting performance from subordinates.

Shelp argues that this very aspect—of flouting rules and ignoring business code—may have been his Achilles’ heel. US businesses faced a drastically changed regulatory climate in the early 21st century, when governance and corporate malfeasance issues took centrestage, following the corporate scandals such as Enron and WorldCom. Greenberg failed to adjust to the new era of regulation and populist government action. New York attorney-general, Eliot Spitzer, who was later caught for patronising expensive call girls, gunned for Greenberg, accusing him of cooking the books. Greenberg was thrown out of AIG which he had so skilfully shepherded for so long, by the very board he had handpicked. However, the author believes that the offences that got his former boss booted out were rather minor; a reversal of Greenberg’s suspect decisions would have resulted only in a 3% write-down of AIG’s equity. And Spitzer, after all, was also not clean.

Ron Shelp addresses several unanswered questions. Why would Greenberg risk his fortune to fiddle with insignificant numbers? Why was Spitzer hell-bent on gunning for Greenberg? Was it Greenberg’s hubris that ultimately led to his downfall or was it the very corporate culture that was so unique to AIG? The book explores the reasons behind the US government’s $85-billion bailout package for AIG. It also captures Greenberg’s efforts to rebuild his reputation and describes his ongoing legal battles. A good read.