Former AIG head denies he started exec bonuses

[March 20, 2009]  WASHINGTON (AP) -- Former AIG chief executive officer Hank Greenberg said the company under his leadership never had the kind of retention bonus system that has subjected it to withering criticism.

"When I was there, nobody had a contract with the company, including me," Greenberg said in a nationally broadcast interview Friday. "If you didn't do the job, you didn't deserve to be there. We had a bonus plan based on performance."

Greenberg's interview was broadcast on CBS's "The Early Show" a day after the Democratic-led House approved a bill that would impose punitive taxes on big employee bonuses from AIG and other firms bailed out by taxpayers.

"We want our money back and we want our money back now for the taxpayers," declared House Speaker Nancy Pelosi, D-Calif.

The bonuses, totaling $165 million, were paid to employees of the troubled insurer, including to traders in the financial unit that nearly caused the company's collapse.

On Wednesday, the current chairman and CEO of AIG, Edward Liddy, told Congress under oath that his predecessor was responsible for the financial problems the company now is experiencing, saying mistakes had been made on a scale few could have imagined.

Greenberg denied that in the CBS interview.

"Absolutely not," he replied when asked directly if he would have paid out the retention bonuses had he still been at the helm of the company. Revelations of the payments triggered widespread outrage across the country and on both sides of the political aisle.

Greenberg said he didn't think Liddy was qualified to run the company, but stopped short of calling for his firing.

"I think he should be replaced," he said. "You can call it what you want."

Greenberg said that AIG once was "the greatest company in history."

"Was there fraud? Was there whatever. I think it's stupidity. Well, do you punish stupidity," he said.

The bill was passed on a 328-93 margin despite sharp Republican attacks calling it a legally questionable ploy to cover up Obama administration missteps on this issue.

House Minority Leader John Boehner, R-Ohio, said the bill was "a political circus" diverting attention from why the administration hadn't done more to block the bonuses before they were paid.

Although a number of Republicans cast "no" votes against the measure at first, there was a heavy GOP migration to the "yes" side in the closing moments. The bill now goes to the Senate.

[Associated Press]

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