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The Randian and the Bailout

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Golub typed his resignation letter and gathered up his things. Benmosche had won again. “There’s no ‘we’ in CEO,” he says smugly.

In the next few months, they sold Alico to MetLife for $15.5 billion, then took AIA public. Benmosche priced the IPO deal on the phone while getting a round of chemotherapy. “We raised $25 billion in cash,” he says. “We’ll wind up with about $33 billion. It’s good, but $35 billion and getting it done two years ago would have been better.”

This fall, almost exactly four years after the financial crisis, the bailout of AIG was declared a success. “A good bailout,” as one Bloomberg anchor put it, as if there were such a thing. On the heels of the news from the Federal Reserve and Treasury, AIG announced that it would once again sponsor a sports team for the first time since it was forced to dump Manchester United. Granted, it was the New Zealand All Blacks, which have a black-on-black logo, but still, baby steps. The subsidiaries Chartis and SunAmerica are both preparing to take back the AIG name. And Benmosche is finally getting the hosannas he has always believed he deserves.

Even Morris Offit has converted. “I don’t want to get too theological,” he tells me. “But he’s kind of like Moses.” (The Charlton Heston version, he notes. “With the horses and everything.”)

When I see Benmosche in September at a gala in New York, he’s beaming. “The morale of the company is sky-high,” he booms. He doesn’t even seem bothered that people are touting the sale as an accomplishment for the Obama administration and suggesting its timing was politically motivated. “George Bush took credit for it, too!” he laughs. “I would say that Geithner is probably the most pleased, because he’s off the hook,” he says. “I know he didn’t think it was possible to pull off. But nobody gets credit for AIG. If it was up to the government we wouldn’t be here today. The government would never have gotten their money back. They shit on us all the way through it.”

Well, maybe he’s a little bothered. But he magnanimously offers to share the credit. “People are saying its all about Bob,” he goes on. “If anyone deserves credit it’s Sarah Dahlgren and Jim Millstein. In spite of the people they worked for, we got things done. I’m not being modest—I mean, I did have a lot to do with it.” At which point he spins off to celebrate his “happy ending,” as a Treasury representative called it the Times.

AIG’s dependence on the U.S. government is still far larger than Benmosche would ever care too admit. As one bond manager recently told Bloomberg about the still-too-big-to-fail company, “Having the government as a creditor? That’s a great place to be.” And though AIG is half its former size, it’s still gigantic, and the view from inside the company isn’t uniformly sparkling. “It’s a mess,” one consultant who has been working in one of AIG’s subsidiaries tells me over drinks recently. A young woman with an impressive resumé, she’d taken a job as consultant at AIG’s in order to move to New York. “AIG is a jobs program for consultants,” she laughs. “That’s what everyone calls it!” She goes on to describe a “dysfunctional” atmosphere, where a largely checked-out workforce regularly shrugs off mistakes saying things like, “If we were any good, we wouldn’t be working at AIG.” A guy in her department appears to do literally nothing—he brings in his own laptop and spends his days surfing the web and talking about strip clubs and how much he drank in Cancun last weekend. “These aren’t people making millions and millions in bonuses,” she says. “They’re people who just think, you know, I have this job, the economy is bad, I can’t be selective, there’s a nice paid vacation. It’s like,” she gropes for the words. “A government job.”

But even this consultant seems to be rooting for Benmosche and hopes her assessment will reach the CEO. “He seems like he wants to do the right thing,” she says, earnestly. On Wall Street, things are only worth as much as people care to believe. “If Bob did nothing else, he has made people believe in a vision,” says Tom Russo, sitting in his office, high above a street that, against all odds, is still bustling.


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