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The Randian and the Bailout

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As Reynolds walked through the particulars of how they planned to spin off some companies, Benmosche grew increasingly agitated. “I don’t know what she’s talking about,” he finally blurted out, pointing at Reynolds. “We’re not doing any of this. You just go back and you stop the IPO process and you stop the sale process. You let me figure out what’s going on.” The room went silent.

“It was one of the most awkward moments in business I have ever witnessed,” says a person present at the meeting. “He basically executed her in front of everybody.” Reynolds resigned later that day.

Next, Benmosche went to rally the troops at Financial Products in Wilton, Connecticut, who were still salty about Liddy’s appearance in front of Congress and the law subsequently passed by the House taxing 90 percent of AIG pay (it never made it any further). “I want you to understand that what happened will not happen again,” he told them. Then he flew to Houston, where he spoke at a town-hall meeting with 3,000 employees. After that, he headed back to Croatia. “It was the first Zinfandel harvest,” he explains.

He’d informed Treasury when he’d taken the job that he needed to be in Croatia for two weeks in August, for the celebration accompanying the inaugural reaping of his vines. But they were not prepared for the image of Benmosche that flashed on their screens two weeks after he’d been hired to run one of the most troubled companies in the Troubled Asset Relief Program, showing off his villa while a British-accented voice-over noted its “palatial” proportions and queried, in serious-sounding tones, whether the CEO should be so overtly relaxed.

“I mean, I had just hired this guy,” Millstein says now, choking back the slightly hysterical laugh that tends to bubble out of him when he talks about Benmosche. “And there he is, in his shorts and his polo shirt. It was just …” he trails off. “You couldn’t make it up.”

Villa Splenid, as Benmosche calls his property, was built for the treasurer of the king of Yugoslavia, and it is indeed palatial, a five-tiered palazzo filled with tapestries and new-looking Louis XIV furniture, perched above the bay. When the sun hits its limestone walls, the whole place glows like a monument to the architectural achievements of the one percent.

For the lord of such a manor, Benmosche is disarmingly quick to welcome people into his home, which is how a throwaway comment landed me here, along with Christina Pretto, AIG’s head of corporate communications; Benmosche’s wife, Denise; and assorted drop-ins, including Fernando the wine merchant, who one afternoon materializes in front of me dripping wet from the hot tub.

He’s driven down from Bosnia with a chef from Sicily and the maximum amount of wine that trade restrictions allow, which is still more than it used to be. “Good thing is this!” he says, tottering off to find a towel. “It is not what you are doing in the United States, which is socialism.”

One night, Boris Cerni, the Bloomberg correspondent who ambushed Benmosche at his vineyard in the summer of 2009, stops by. The video had been great for his career, less so for Benmosche’s. The Obama administration was horrified by the headlines about the “tone deaf” vacationing CEO as well as the interview Benmosche subsequently gave to Reuters, in which he showed off Villa Splendid’s twelve bathrooms (“Women go wild when they walk in here”). And they were livid the following Monday, when Bloomberg began publishing a series of articles about the town-hall meeting he’d given in Houston, during which he blamed federal regulators for the financial crisis and spelled out what he’d say if he ever got in a room with Andrew Cuomo, who’d threatened to subpoena the names of Financial Products employees receiving bonuses. (“I will tell you, there won’t be a nice word.”) Or if the “crazies” in Washington talked to him like they did Liddy. (“You can stick it where the sun don’t shine.”)

Millstein called Benmosche in Croatia. “You’ve got to stop,” he said wildly.

“I have stopped,” Benmosche said serenely. Millstein could hear the cicadas chirping in the background. Benmosche explained that the reporter had gotten hold of a tape of the town hall and was publishing one quote at a time.

Millstein stopped breathing. “There’s more?”

There was just one more thing, about a meeting that weekend where Benmosche had boasted that “a part of his anatomy was bigger than the government’s.”

“I’ll tell you exactly what I said,” says Benmosche. “I said, ‘They may have big balls, but my balls are bigger.’ ”

“Those were the darkest days of my career at the Treasury,” Millstein now says.


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