When Robert Benmosche, American International Group (AIG) president and CEO, recently compared criticism of the government’s decision to pay huge bonuses to discredited AIG Financial Products (AIGFP) employees to the lynching of blacks during the civil rights battles several decades ago, criticism was immediate and intense.
Benmosche effectively moved to quiet the uproar by venturing down to the Washington, D.C., office of his chief accuser, Rep. Elijah Cummings, D-Md., and appropriately apologize, bringing the matter to a quick end.
It is impossible to explain what Benmosche sought to accomplish by linking AIGFP bonuses to Civil Rights-era lynchings unless you understand the man.
It can be understood only by realizing that Robert Benmosche is a take it or leave it type of guy. He took on an impossible job when he didn’t have to, having already received the acknowledgement – even from detractors whose toes he stepped on – that he had done an excellent job transforming MetLife from a stodgy, insulated mutual company into a successful stock company in the late 1990s-early 2000s era without a misstep. He made enemies by rapidly changing the culture at MetLife, according to insiders.
A profile in the New York Times a year ago helps explain the man. In it, Benmosche acknowledged that he’s an “in-your-face CEO.” The author explained that Benmosche looks at the world “from his vantage point six feet and four inches above the ground.” And that “he is a big guy. Big block-shaped head. Big ham-sized arms. Infamously big mouth.”
Beyond physical appearance, the article also noted his somewhat abrasive personality. ‘“People say I use colorful language,” he told a room of people once. “Well, that’s a bunch of bullshit!’”
In sum, that correctly characterizes Benmosche.
Both supporters and critics quickly made themselves disappear recently when asked why Benmosche would make such a remark. At the same time, they confirmed that Benmosche’s quirky style covers up the fact he is a very effective, indeed, gifted, CEO.
Republicans had received the lion’s share of the political bennies when Maurice “Hank,” Greenberg headed AIG. There was a famous incident in the early 2000s when President George W. Bush held a reception in the White House for the industry, and there was a conga line of industry officials, all of whom had given large donations to the Bush campaign, standing there ready to shake the president’s hand.
However, when entering the room, the president walked past most of those attending to greet Mr. Greenberg. “How are you?” the president asked Greenberg, a charter member of the Pioneer Club, Bush’s elite fund-raising arm.
It wasn’t Mr. Greenberg there, however, on the receiving line when the Bush administration was forced to throw a huge lifeline to AIG starting in the fall of 2008.
And, it was neither Mr. Greenberg nor Mr. Bush who was on the fire line in 2009 when the scope of AIG’s problems began to surface, and Republicans in Congress somehow managed to totally shift the onus for AIG’s large and complex problems to the Obama administration. They were able to do so, partly with the help of wimpy Democrats who also received AIG largesse during the golden years, even though the Republicans were totally responsible for AIG’s problems.
The key players were Newt Gingrich, the speaker of the House, and his designated Mr. Fix-it, John Boehner, who pushed through Congress the Gramm-Leach-Bliley bill that walled off the life and P&C insurance industry from competition by other financial service providers. And, it was Jeb Hensarling, as an aide to Sen. Phil Gramm, R-Texas, chairman of the Senate Banking Committee, who had written the provision in the bill that barred the Federal Reserve Board from overseeing insurance holding companies.
Republicans in the House pounced on the Obama administration and the Fed for AIG misdeeds they had no role in creating, telling administration officials, “You should resign!” and, “I have no confidence in you.”
It was into that maelstrom that Benmoshe entered. The administration had found Edward M. Liddy, formerly of Allstate and who had been appointed by the Bush administration, wanting and Benmosche produced. He didn’t complain when the Feds demanded a ruthless restructuring of the company so that the administration could say the taxpayer had made a profit despite AIG’s myriad problems. And he worked with what he had to resurrect AIG into a domestic, if no longer a global, power.
It is one thing to successfully remake an old-style mutual insurer into a financial services power, one that is now venturing into the tough global world. It is even tougher to agree to take over a company that was in the eye of a Category Five financial and political storm, and succeed again.
That is how you explain the sometimes unexplainable Robert Benmosche.