Hank Greenberg Takes a Beating

As far as Maurice "Hank" Greenberg is concerned, the staggering AIG mess is all somebody else's fault. When he was in charge, everything was hunky dory.

That's what he told Congress today, when summoned to testify before the House Oversight and Government Reform Committee, but lawmakers weren't buying his story that the government was to blame for the multibillion-dollar debacle at the insurance giant.

Getting right to the point, Maryland Democrat Elijah Cummings said Greenberg conveniently forgot to mention that many of the risky bets that tripped up the giant insurer were made before Greenberg was forced out of the company in an accounting fraud investigation four years ago.

Such verbal pummeling isn't unusual these days for lords of the business universe -- current and former -- when they testify before an irate Congress. Everyone is beyond furious that the government has poured $182 billion into a company that seems wedded to spectacular executive bonuses and lavish business travel.

But even before Greenberg, 83, took the hot seat, Republicans rushed to take a public poke at the credibility of the man who spent four decades building the company.

California's Darrell Issa urged the House Oversight and Reform Committee to disinvite Greenberg or to "join me in publicly acknowledging the veracity of his testimony is questionable."

Greenberg is involved, directly or tangentially, in nine civil and criminal lawsuits, Issa said, and could face securities fraud charges by the Securities and Exchange Commission "at any day."

Issa said that committee Republicans "historically" have "taken exception to hearings which provide individuals of impeachable character a forum to rehabilitate themselves."

The historical record he cited: a 2007 letter from his predecessor, Tom Davis of Virginia, to then chairman Henry Waxman complaining that the planned testimony of Rory Maybeny for a hearing on waste and fraud in building the new U.S. Embassy in Iraq was compromised by arrests and convictions.

Back at the hearing, Greenberg proved he was still nimble in the blame game by urging that counterparties including Goldman Sachs, Deutsche Bank and Société Generale repay the $50 billion that AIG had to fork over to make good on credit default contracts. The counterparties could take stakes in AIG, said Greenberg, who remains the insurer's largest shareholder.

by Elizabeth Olson