Greenberg, AIG and the Army
October 18 | Posted by mrossol | American Thought, Losing Freedom, Party Politics, Politically correctWSJ – 10/14/2016
The first weeks of Hank Greenberg’s trial suggest that, 11 years after then-New York Attorney General Eliot Spitzer cried fraud and drove Mr. Greenberg out as CEO of AIG, prosecutors are still struggling to make a case.
The New York Attorney General’s office has been overruled on efforts to introduce hearsay evidence, as well as material irrelevant to the case. Prosecutors also struck out when they tried to have a lay witness offer opinions, a legal privilege reserved for experts. Without direct evidence that Mr. Greenberg committed fraud or told anyone to do so, the prosecution is attempting to make a circumstantial case that he was a control freak who therefore must have been responsible if anything improper occurred.
To buttress this narrative, the AG’s office has pointed to excerpts from a corporate memoir Mr. Greenberg co-authored in 2013. “Many of AIG’s senior managers were former U.S. military officers,” Mr. Greenberg and Lawrence Cunningham wrote. “The command-and-control hierarchy of military discipline, loyalty, and organization became part of AIG’s culture. Managers and employees assumed that corporate directives would be followed.”
What a destructive precedent it would set if courts decide that running a disciplined organization counts as evidence of complicity in allegedly illegal acts, whereas lax management is a liability shield on the assumption that weak executives don’t recognize wrongdoing.
If Mr. Greenberg’s request for a jury trial had not been denied, a panel of citizens would likely have been interested in more than mere assumptions. Two unassailable facts are that Mr. Greenberg built one of the largest insurance companies in the world and that Eliot Spitzer nearly destroyed it by replacing Mr. Greenberg with managers who bet on the housing market.
The various courtroom references to Mr. Greenberg’s military service may have inspired this illuminating exchange between Justice Charles Ramos and the former AIG CEO, captured in the trial transcript: The court: I have one question or a couple of questions to ask Mr. Greenberg. You said you visited Europe from England. Was that in 1944?
The witness: Yes.
The court: Do you recall the month?
The witness: June.
The court: You wouldn’t recall the day; would you?
The witness: 1944, June 6th.
A note to the youngsters prosecuting Mr. Greenberg: That was D-Day. We’re guessing that the young staff sergeant who landed on Omaha Beach never dreamed that his military service would be used 72 years later as evidence against him. He probably had other things on his mind.
Does a disciplined organization count as evidence of wrongdoing?
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