AIG chief regrets attacking New York's Cuomo
The board of embattled insurer American International Group must privately be wondering if they made the wrong choice in their new CEO.
Robert Benmosche, who took over the company’s helm on Aug. 10, now says he regrets making derogatory comments about New York Atty. Gen. Andrew Cuomo in a closed-door meeting with employees last month.
Bloomberg News reported on Monday that Benmosche attacked Cuomo for the attorney general’s move in March calling attention to AIG employees who were due to receive previously agreed-upon retention bonuses.
Cuomo subpoenaed AIG for the names of the employees, saying he wanted to investigate whether "any of the individuals receiving such payments were involved in the conduct that led to AIG’s demise and subsequent bailout" by the federal government.
"What he did is so unbelievably wrong," Benmosche said of Cuomo at the Aug. 11 meeting with employees in Houston, according to a record obtained by Bloomberg. "He doesn’t deserve to be in government, and he surely shouldn’t be the attorney general of the state of New York. What he did is criminal. You don’t create lynch mobs to go out to people’s homes and do the things he did."
But Cuomo, despite his political blustering about the money and calls to have the payouts returned, didn’t encourage lynch mobs. In fact, he stood fast against calls to release the names of the bonus recipients.
AIG late Monday put out a statement saying that Benmosche "regrets his comments regarding Mr. Cuomo and the tone of those comments. Mr. Benmosche now recognizes that [Cuomo] resisted public pressure to disclose the names of AIG employees during the controversy in March regarding compensation, and with emotions running high, he noted the importance of all parties to proceed with care and sober judgment."
In an interview with Reuters today, Benmosche, who came to AIG from MetLife Inc., said he had apologized to Cuomo’s office. But he then tried to explain his way out of the comments.
"You can characterize me as a goon or you can characterize me as somebody who is attempting to deal with a complex issue of a very demoralized employee force and said those things to them in confidence to reassure them that they no longer have to be afraid that they are going to be attacked again," Benmosche told Reuters.
"One should not misconstrue my aggressive comments -- which were aggressive," he said. "But, on the other hand, I think the government understands that I said what I said.
"I said I would be aggressive before I came on board, and this is going to require strong, aggressive leadership to get this company righted and be able to make good on all of our obligations. They need an aggressive person."
But AIG doesn’t need a loose cannon, which is what an aggressive CEO who can’t get his facts straight risks being labeled.
AIG’s stock, which had soared in August as speculators piled in, is suffering a mini-meltdown with the rest of the financial sector today. The shares were off $7.73, or 17%, to $37.60 at about 11:45 a.m. PDT.
-- Tom Petruno
Photo: Robert Benmosche. Credit: Nikola Solic / Reuters