Fallen Giant

Reviews / Votes

"Ron Shelp...does a great job of delving into the individualpersonalities and their motivations, leaving the reader with afront row seat to AIG's genesis, growth, and fall fromgrace." (The Investment Professional) "All Hank Greenberg ever wanted was "an unfair advantage." Thatis the phrase that Ron Shelp chooses to sum up Maurice R.Greenberg, the deposed chairman of the American International Groupand the subject of his "Fallen Giant: The Amazing Story of HankGreenberg and the History of A.I.G.," and it would be hard toimprove on. Insurance, Mr. Greenberg realized early, is the game of playingonly when the odds are in one's favor. For instance, if afar-flung customer wants insurance against a kidnapping -- arisk that few others will touch -- chances are that you cancharge a lot for the policy. As Mr. Greenberg did not fail tonotice, plenty of overseas executives are kidnapped, but many moreare not -- and they pay premiums, too. Throw in a few other "unfair" advantages, like lobbying,cajoling or otherwise persuading governments to do one'sbidding as well as, quite possibly, obscuring some of the truthabout one's operations, and you have the secret of a greatinsurance fortune. Accusations of cooking the books more or less forced Mr.Greenberg to resign last year. Mr. Shelp, a former Greenberglieutenant and troubleshooter at A.I.G., wrote the book ostensiblyto explain his old boss's fall from grace. He asks some very good questions. One is why Mr. Greenberg wouldrisk his $3 billion fortune on some "fairly modest fiddling."Another is this: What did Eliot Spitzer, New York's attorneygeneral and now its governor-elect, have against Mr. Greenberg,whom he all but accused of criminality on Sunday morningtelevision? Then, after the A.I.G. board forced Mr. Greenberg toresign, Mr. Spitzer neglected to charge him after all. Well, nevermind. (Mr. Spitzer did file civil charges, which Mr. Greenberg iscontesting.) Mr. Shelp leaves no doubt that A.I.G. was a master at shapingand, at times, bending the rules, but he argues that the offensesthat got Mr. Greenberg canned were pretty modest, and notes thatreversing the deals in question resulted in a write-down of only 3percent of A.I.G.'s equity... ...Alas, even modest fiddling, such as the "earningsmanagement" he was accused of, is no longer tolerated in Americanbusiness. Mr. Greenberg seems not to have noticed. But even ifA.I.G. hadn't changed, the world had". (New YorkTimes, December 17, 2006)