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Wall Street

Wow, that's some crisis.  “In the Business Insurance magazine…the U.S. Chamber of Commerce have announced their new, or rather recycled PR messaging trying to link the relatively infrequent litigation by consumers against corporations, and job loss.”

“Nothing like trying to exploit the country’s economic crisis with myths and fear-mongering to pad the bottom line of their members. Seem like a shrill thing to say?”

“Well, we decided to see what businesses themselves really think about this argument…So we checked out the most recent…survey issued by the National Federation of Independent Businesses (NFIB)….We started to look down the list of 75 issues that are important to NFIB’s members. And we looked. And we looked. Finally, we hit #65: “Cost and Frequency of Lawsuits/Threatened Lawsuits.” That’s right, this issue ranked 65 out of a possible 75 matters that small businesses care about, just below "Solid and Hazardous Waste Disposal."  Excerpted from: "Tort Reform" and Jobs - No Link At All, Center for Justice & Democracy ( 7-25-11

Torture chamber.  “The U.S. Chamber of Commerce is mounting a new legal attack on the Obama administration's regulatory…”

“Thomas Donohue, the chamber's president and chief executive, said…’Litigation is one of our most powerful tools for making sure that federal agencies follow the law and are held accountable…”

“The group on Thursday unveiled a new publicity drive with a strong anti-regulation theme, which is designed to complement its legal fight to blunt regulation.”

“…the chamber has been sharpening its knives to attack the administration's efforts to tighten oversight of health insurers, the financial industry, and greenhouse gases.” Excerpted from: U.S. Chamber Pledges to Take Obama Policies to Court by Mark Hosenball, Reuters 10-7-10

Second verse. Same as the first? "Maurice R. Greenberg, who built the American International Group into an insurance behemoth with an impenetrable maze of on- and offshore companies, is at it again."

"Even as he has been lambasting the government for its handling of A.I.G... Mr. Greenberg has been quietly building up a family of insurance companies that could compete with A.I.G. To fill the ranks of his venture...he has been hiring some people he once employed."

"Mr. Greenberg's success may be at the expense of taxpayers. People who work in the industry say that if he is already luring A.I.G.'s people, he may soon be siphoning off its business and, therefore, its [AIG] means to repay its debt to the government."

"A.I.G., meanwhile, is struggling to regain its footing. The recipient of the biggest taxpayer bailout in history, it has been ordered by the government to restructure, unwind its complex derivatives and pay back the taxpayers."
Excerpted from: Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm, By MARY WILLIAMS WALSH, New York Times 10-27-09

Hank's larcenous anger issues. "Former AIG CEO Maurice "Hank" Greenberg admitted...he was angry about losing his job in 2005, but defended taking over a retirement bonus fund that AIG is trying to recover in federal court."

"Yes, I was angry," said Greenberg, responding to a question from AIG's lawyer Theodore Wells. Wells argued...that Greenberg...raided an AIG retirement program [Starr] holding $4.3 billion in stock because he was angry about losing his job..."

"The lawsuit against Greenberg and Starr involves a fund created in 1970...Its value grew to $4.3 billion...The fund was Greenberg before 2005 as a retirement bonus fund for select...employees...a "kind of golden handcuffs" given to members of "the inner club." "...AIG has received $182 billion in federal aid...AIG said if it can reclaim the $4.3 billion the money would help it pay back the government." Excerpted from: AIG ex-CEO says he was 'angry' about losing job in '05 by MADLEN READ, Associated Press 6-17-09

A Never-Ending Scandal, er, Story  "A senior member [Rep. Elijah E. Cummings, D-MD] of the House Committee on Oversight and Government Reform wants his panel to investigate whether insurance giant AIG Inc. and other providers have unnecessarily denied and delayed costly medical treatment for civilian contractors injured in Iraq and Afghanistan.

The letter cited media reports last week disclosing that insurance companies routinely challenged serious injury claims of civilian workers returning from the war zones. Private contractors have been forced to battle for basic medical needs...

Last year, the government reform committee determined that AIG had collected $1.3 billion in premiums on the insurance between 2002 and 2007, while it had paid out about $800 million --leaving the company with a nearly 40% profit. The Pentagon has recently begun an inquiry into whether such premiums can be lowered." Excerpted from: AIG faces inquiry over medical care for U.S. contractors, Los Angeles Times By T. Christian Miller 4-22-09

I was the CEO for a mere 40 years, but it's not my fault. "The man who built failed insurer American International Group bracing for tough questioning on Capitol Hill."

"Maurice "Hank" Greenberg is appearing before the House Oversight Committee..."

"Greenberg is expected to tell the panel he bears no responsibility for AIG's downfall, despite his having served as chief executive for nearly four decades, until March 2005." Excerpted from: Former AIG CEO criticizes successors, bailout by Daniel Wagner, Associated Press 4-2-09

Oh no you didn't! "The former chief executive officer [Maurice "Hank" Greenbergl] of American International Group Inc. on Monday sued the company he led for 38 years, saying AIG misled investors about its exposure to subprime mortgages."

"...claimed in papers filed in federal court in Manhattan Monday that the company... has ruined his fortune by lying about its financial health."

"...a company spokeswoman, said: "We believe the suit is without merit and we will defend ourselves vigorously."

"Greenberg was forced out of AIG amidst a controversy in spring 2005 when the company restated its financial statements for the previous five years, acknowledging accounting improprieties, including 'improper or inappropriate transactions.'
Excerpted from: Former AIG CEO sues the company in NY, saying AIG took his fortune through deceit, Associated Press 3-3-09

Tragically Ironic.
February 24, 2004 "The chairman (Maurice R. Greenberg) of American International Group...called lawyers opposed to tort reform "terrorists"...

"Greenberg used graphic language as he railed against an American tort system.... He accused plaintiff's lawyers of venue shopping... "You know you're going to get raped...when you appear there," Greenberg said."

"Our legal tort system is out of control," he said, estimating class-action lawsuits shave 2 percent off the U.S. gross domestic product every year. "It's a blight on the country." 1

February 19, 2009 "Former American International Group Inc. chairman Maurice R. Greenberg criticized the Obama administration's steps to restrict executive compensation for firms that receive federal aid...."

"What kind of people are you going to get for $500,000? Anyone with real talent will just go elsewhere," Mr. Greenberg told an audience in New York Thursday..."The best managers will move to private companies that are not receiving government funds, and therefore do not face pay caps," he said."

"Mr. Greenberg-who resigned as chairman and CEO of AIG in 2005 amid investigations of its accounting practices..." 2

February 23, 2009 "The American International Group, the battered insurance giant that is now effectively majority-owned by the federal government, is in talks to receive more government aid as it prepares to record another giant loss." 3    
1 Excerpted from: AIG Chief Calls Some Lawyers 'Terrorists' By Tim McLaughlin, Reuters Feb 24, 2009,
2 Excerpted from: Greenberg slams pay cap plan, AIG bailout By Colleen McCarthy, Business Insurance 2-19-09
3 Excerpted from: A.I.G. to Seek More Government Aid, The New York Times 2-23-09

Finger-pointing syndrom. "Nearly 80% of companies describe their firms as not ready for a government or regulatory investigation, according to a new Deloitte Financial Advisory Services online survey of 1,100 executives."

"Only 20.8% of executives say their companies are "very ready" for a government investigation despite the fact that 26.5% had been subject to a government probe during the past two years."

"...executives disagree on the chain of responsibility for such investigations. The executives placed responsibility on several entities, with 20.9% naming internal audit committees, 18.6% fingering general counsel and 5.6% citing the board of directors or audit committee." Excerpted from: Survey: 80% of companies are not ready for government or regulatory investigations by Sheri Qualters, National Law Journal Feb. 18, 2009.

Oh...I get it! All you do is tweak the math to increase your net worth. "Allstate, the big insurer, last week declared that despite unprecedented trouble in the markets, it remains financially strong."

"But tucked deep inside a company report is evidence that Allstate changed its bookkeeping last year in ways that improve its financial appearance."

"One accounting change added $347 million. Another delivered a year-end boost of $365 million." Excerpted from: Insurers' Finances Clouded by Bookkeeping Changes By David S. Hilzenrath, Washington Post, February 6, 2009

ME TOO! ME TOO! "When the government said it would spend $700 billion to rescue the nation's financial industry, it seemed to be an ocean of money. suddenly looks like a dwindling pool.""...The shrinking pie - and the growing uncertainty over who qualifies - has thrown Washington's legal and lobbying establishment into a mad scramble."

"The lobbying frenzy worries many traditional bankers --- the original targets of the rescue program - who fear that it could blur, or even undermine, the government's effort to stabilize the financial system after its worst crisis since the 1930s."

"The gave the Treasury broad authority to decide how to spend the $700 infusions are available to "qualifying U.S. banks, savings associations, and certain bank and savings and loan holding companies, engaged only in financial activities."

"That definition has grown to include private banks and insurers like Allstate and MetLife, which own savings and loans."
Excerpted from: Lobbyists Swarm the Treasury for Piece of Bailout Pie By MARK LANDLER and DAVID D. KIRKPATRICK, New York Times 11-12-08

Ouch, that could possibly hurt. "Congress wants Wall Street to feel it where it hurts: the wallet."

"The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress crafts a $700 billion bailout for financial firms.""The moves in Washington mirror the popular outcry...over the prospect of Wall Street's tarnished titans walking away with tens of millions of dollars a year while taxpayers pick up the tab."

"But Wall Street, its lobbyists and trade groups are waging a lobbying campaign to try to fight compensation curbs."

"Wall Street has been the top tier of the corporate pay range...Its bonus system...has been singled out as an incentive for executives to expand their highly profitable business in exotic securities and ignore the risks."
Excerpted from: In Bailout Furor, Wall Street Pay Becomes a Target By STEVE LOHR New York Times, September 23, 2008 (The Los Angeles Times contributed to this report).

Not bad pay for a summer job. "American international Group head Robert Willumstad, named CEO in June... may get a $7 million exit package after a Fed takeover forces him out...Willumstad is entitled to keep a $4 million cash bonus, 1 million shares, six months' severance salary and life insurance and other benefits worth about $40,000, said David Schmidt, a senior consultant at New York-based executive pay firm James F. Reda & Associates."
Excerpted from: EX-AIG CEO EYES $7M EXIT, Bloomberg 9-18-08