Bye, bye Greenberg

I wonder what our Senators thought they were accomplishing when they "detained" a dozen Standard Chartered Bank executives, including Simon Morris, the bank’s country manager, for six hours.

The members of the Senate banking committee had apparently been angered by a legal submission earlier filed with the Supreme Court to "stop" the Senate from investigating customer complaints against it, pointing out that the matter was already the subject of several court cases.

So they expressed their displeasure by "holding" the bank officers who went to the Senate "prisoners" for a six-hour period. I agree with our indignant solons that the committee was insulted by the bank’s reported suggestion that its investigation was "in aid of collection" by some irritated clients rather than "in aid of legislation" – but the Senators’ remedy was more damaging to our legislative chamber than the insult itself. It made our well . . . "solons" look like a bunch of vengeful school bullies taking revenge on smaller kids on the block.

Did the Senate "detaining" Morris and company gain them added "respect", or instead loud guffaws all over the world for unusual and childish prickliness?

Our only consolation is that in England, even in the mother of parliaments, some of their MPs, and indeed hereditary peers of the sometimes cobwebbed House of Lords, sometimes act in the same peevish manner.

But the British wit Noel Coward once summed up that characteristic of English phlegm with the phrase, "mad dogs and Englishmen . . ." In our case, what is our excuse?

I’m not even worried that the incident might have caused foreign investors to shy away from our unpredictable and choleric country. They are already doing that, anyway.

* * *

It’s cause for celebration that the Commission on Appointments has "confirmed" the appointment of Secretary Alberto G. Romulo – a distant relation of Bobby Romulo, alias "Triple R" – as Secretary of Foreign Affairs.

A former Senator, former Executive Secretary, brilliant lawyer, statesman and linguist, and, above all, a true gentleman of the old school, Brother Bert has already been doing a yeoman job (once more, pardon the old-fashioned, almost trite expression) of promoting our nation’s interests in the diplomatic field.

But why did the Commission have to grill Romulo intensively, before giving him the nod, on the case of our OFW from Davao, Roberto Tarongoy, who’s been in the hands of Islamic militants in Iraq for some months now? Everybody knows that our government, through the DFA and other agencies, has been doing its best to "negotiate" with Tarongoy’s captors for his release, agonizing through a couple of "deadlines" for the unfortunate hostage’s threatened "execution". To begin with, anything Secretary Romulo could say in Congress might hurt Tarongoy’s chances of survival and hopeful release – so mum should be the word. Our politicians ought to understand this, and desist from grandstanding on the issue.

For that matter, what have we got to trade for poor Tarongoy? We already precipitately yanked out our tiny contingent from Iraq last year to secure OFW Angelo de la Cruz’s release from other vicious militants. As I said at the time, we mortgaged our honor and went back on our pledge to the coalition to save Angelo from being beheaded. We’ve got nothing left with which to bargain. The payment of ransom? We can’t even "convince" either the Americans, nor our other erstwhile "allies" in Iraq to pull out of there.

We pray that Tarongoy’s ordeal will have a happy ending, and he can come home to be reunited with his family. But the outcome is in the hands of God. The fact is that everyone who ventures into Iraq to work, or visit, is at risk.

Indeed, everyone of our OFWs in the Middle East, particularly in those countries in the neighborhood of the conflict there, realize they are in harm’s way. But work for a living they must. We keep on calling them heroes and heroines, which they are – but, also, they are hostages to fortune.

In the diaspora, there are never any guarantee. Sus, neither are there any guarantees of everybody’s safety right here at home.

We just simply have to keep on striving to do our best – and to be our best.

* * *

It looks, going by yesterday’s issue of the Financial Times (Wednesday, March 16) that the American International Group (AIG), parent company of PHILAMLIFE and the powerful conglomerate once held up for idolatry by such business big shots here as certain stalwarts of the Makati Business Club as a paragon of business ethics and "good governance", is in sad disarray.

According to the Financial Times, one of the globe’s daily business bibles (published simultaneously in three continents), "Martin Sullivan, the newly-installed chief executive of American International Group, was yesterday dealt a setback on his first day in the job when a credit agency stripped the world’s biggest insurer of its AAA rating."

Fitch declared that "the regulatory problems that had forced the departure of Maurice ‘Hank’ Greenberg" as AIG’s chief executive "were inconsistent with the highly conservative and stable profile required of a company assigned an AAA unsecured senior debt rating."

What did Fitch imply by its words, "had forced"? That the once all-powerful Maurice Greenberg had been fired? For what? Ha.

The FT report by Ellen Kelleher in New York and Ivar Simensen in London, the newspaper’s senior correspondents, with inputs by David Wighton in New York and Adrian Michels in Milan (Italy), further stated: "Standard & Poor’s placed AIG’s credit rating on review, a signal that the insurer faces a possible downgrade from its AAA status . . ."

Worse, AIG’s stock fell 3 percent – more than the 1.3 percent decline on Monday following Mr. Greenberg’s departure as chief executive. Mr. Greenberg’s demise makes him the most prominent casualty of the tougher regulatory climate in post-Enron corporate America."

In short, Greenberg is out, although, cosmetically perhaps, he "will remain as non-executive chairman." (Again, the FT’s sombre wording).

"The board, whose independent directors are led by Frank Zarb, former head of the Nasdaq stock market, told Mr. Greenberg he had to leave the company or become non- executive chairman."

New York Attorney-General Eliot Spitzer who has been investigating acts of "cooking the books" in corporate America, is obviously not through with Greenberg or AIG yet. The AIG – the FT revealed – has "received subpoenas from the Securities and Exchange Commission and Eliot Spitzer . . . related to a complex reinsurance contract agreed in 2000 with General Reinsurance, a subsidiary of Warren Buffet’s Berkshire Hathaway."

"The e-mails and depositions they received provided evidence to suggest that the contract was used to inflate the AIG’s reserves by $500 million, according to one person close to the investigation," the London-based daily asserted. The article concluded: "Mr. Greenberg has been deposed to give evidence tomorrow."

By gosh – would lying about $500 million constitute a big lie or a small lie?

* * *

For many weeks, the "story" had been suppressed, somehow, in our usually muckraking media – but now has exploded into headlines all over the planet. Imagine the Financial Times running the huge banner headline, with a five column photograph of a greying Greenberg, fingers half-steepled, running all over the top of the front page, captioned: "End of an era: Maurice ‘Hank’ Greenberg, who is to step down as AIG chief executive, is only the second person to run the group since its foundation in Shanghai in 1919."

The banner declared: "AIG CHIEF TO QUIT AMID PROBE." Subhead: "Greenberg’s Role in Accounting Practices Under Scrutiny."

The article noted that "the departure of the 79-year old Mr. Greenberg . . . comes as regulators investigate whether he misled investors about an increase in the insurer’s reserves in 2000."

What’s interesting is the way that page one report concludes with the paragraph disclosing that "Mr. Greenberg, who took the company public in 1968 was only the second person to run AIG since its foundation in Shanghai in 1919 by Cornelius Vanderbilt Starr."

Remember that well-known name, C. V. Starr, whose group of firms founded the Philamlife and other related companies here? He was not related at all to the multi-millionaire American Cornelius Vanderbilt – but was Chinese. Probably ended up much richer, though, that old Cornelius V., the original.

In any event, I hope that our President, GMA, now understands why this writer used to warn her about placing too much of her trust in Mr. Maurice "Hank" Greenberg.

Everytime she went to the United States, she had inserted into her schedule lengthy meetings in New York with Mr. Greenberg who was touted as her guru in our dealings with corporate America and Washington DC.

She once explained to me that she met with Greenberg because he is "chairman of the US-Philippine Business Council." After all, weren’t the biggest promoters of the US-Philippines Business Council – whatever that outfit is – the Hon. Roberto R. Romulo and former Trade and Industry Secretary Rizalino "Roy" Navarro, who happen to be partners in the Romulo, Navarro Management Consultants? Guess they thought Greenberg was the best guy for GMA to consult in "management", but sanamagan, Mr. G couldn’t even manage to squirm out of the fix he’s now found himself enmeshed in.

Too bad.

* * *

Mr. Greenberg is taking as much of a bashing in the influential The New York Times in a series of reports by Gretchen Morgenson and Christine Hauser. As the NYT pointed out, also in a front page story, "Officials from the Securities and Exchange Commission and the office of Eliot Spitzer, the New York Attorney General, have been investigating whether American International Group used certain insurance deals to make its financial results look better than they actually were."

On March 16, "Bloomberg" also stated that "a resignation from Greenberg would mark the biggest executive fallout since New York Attorney General Eliot Spitzer touched off an industrywide investigation of fraud last October."

Last October, Greenberg’s son – Jeffrey Greenberg, described in newspaper reports as "scion of America’s leading insurance dynasty" – was ousted as chief executive and chairman of Marsh & McLennan, the world’s largest insurance broker. At the time, The Financial Times (Oct. 29, 2004) disclosed "the company’s shares slumped by about 40 percent, knocking off as much as $9 billion in market capitalisation."

Marsh, facing the prospect of criminal prosecution by Mr. Spitzer, "seemed to be most at risk. Some analysts drew comparisons between Marsh and Arthur Andersen, the auditor of Enron, which collapsed in 2002…" Spitzer, however, was "lenient" with Marsh & McLennan, after Jeffrey Greenberg was made to quit and was replaced by Mr. Michael Cherkasky.

In fact, Spitzer’s net might have spread wider.

According to USA TODAY" (October 19, 2004), Spitzer had earlier undertaken to tackle "the question of blood ties in boardrooms," accusing "insurance firms run by CEOs from the same family of taking part in a widespread bid-rigging scheme." Mind you, this quotation comes from Edward Iwata, reporter of USA TODAY.

The newspaper’s headline said: "Insurance ‘First Family’ Under Fire."

Spitzer wanted to know how Maurice Greenberg, his son Jeffrey, and his brother Evan Greenberg, President and CEO of Ace Limited, inter-acted with each other – over "family" dinners, and in business as well?

The daily, which claims the biggest circulation in the USA, listed the 2003 revenues of the three powerful "rival" companies, run by dad, uncle, and sonny boy, as AIG, $81.3 billion; Ace Limited, $10.7 billion; and Marsh & McLennan Cps., $11.6 billion.

By golly, what a powerful "family tree" they once had.

Spitzer, now known as America’s most hard-hitting and feared legal crusader, has turned his fire on a swath of international businesses, from insurance and drugs to power generation and music.

And he ain’t through yet.