Republicans doing their utmost to blame AIG's demise on Spitzer

[Dover]

If you google Spitzer/AIG you will find a virtual fire storm of Republican articles and videos that blame AIG's demise on Spitzer. I caught Charlie Rose's show tonight and his guest was none other than AIG founder Hank Greenberg who Rose seemed to have great sympathy for. Greenberg suggested that AIG did not need rescuing (only a bridge loan to get them over a rough patch) and that his former company had been 'nationalized' by the government seizure, bailout/loan. Greenberg also said he and perhaps some partners may attempt to buy back his company (or at least some of its pieces).

Hmmmm....and who to blame for Spitzer's demise?
I just wonder where all the articles are that defend Spitzer against this deluge?


Analysis: Some see Spitzer role in AIG's crisis
AP

ALBANY, N.Y. - Lost by many in the week's financial markets' nightmare were ghosts of Wall Street past.
Some in business and politics are blaming the need for Tuesday's historic federal bailout for American International Group Inc.'s on the relentless pursuit of AIG founder Maurice "Hank" Greenberg by New York's former attorney general, Eliot Spitzer.

AIG needed the $85 billion loan from the federal government to stay afloat, save thousands of jobs and protect its insurance customers, while warding off another blow to a staggered financial market. Running the company during this crisis was an AIG management team brought to power after prosecutions of Spitzer, who parlayed his national stature as a Wall Street crusader to the governor's office, only to resign in disgrace 14 months later.

In 2005, then-Attorney General Spitzer forced Greenberg out of the company he built over nearly 40 years. Spitzer accused Greenberg of conflicts of interest involving a foundation that Spitzer said benefited Greenberg and AIG.

The New York Sun's editorial on Wednesday put it bluntly: "Among all (of Spitzer's) mistakes, it's hard to think of one more catastrophic than his decision to force Maurice `Hank' Greenberg out of the leadership of AIG."
Business blogs and Republican pundits carried much the same message, accurately noting that Spitzer eventually dropped some of his charges against Greenberg, that Greenberg hasn't been found guilty of other charges, and that Greenberg continues to fight back in court.

Blaming Spitzer will get a voice from New York Republicans who could use their favorite target again as they try to retain the Senate majority this fall.


cont'd

http://www.newsday.com/news/local/wire/newyork/ny-bc-ny--aig-spitzer0917sep17,0,4571686.story

[opihimoimoi]

1. Blame the deregulator ....McCreep

[Dover]

2. I thought it was an interesting term Greenberg used..."nationalized".

Similar to what Putin did to take control of Yukos and other companies? Remember his battle with the Russian oligarchs?

And similar to what's happening all around the globe? Is that what Greenberg is suggesting?



Some of what went on in Russia sounds VERY familiar:

The reforms of the 1990s were mainly the work of the advisers brought in under then president Boris Yeltsin. Fearing that the population might soon have a change of heart and turn its back on reform, Yegor Gaidar and Anatoly Chubais, the chief Russian architects of the process, decided to accelerate it, selling off state resources and enterprises at little or no charge. Not long into the process, ownership of some of Russia's most valuable resources was auctioned off by oligarch-owned banks under a scheme called "Loans for Shares." Although they were supposedly acting on behalf of the state, the bank auctioneers rigged the process-and in almost every case ended up as the successful bidders. This was how Khodorkovsky got a 78 percent share of ownership in Yukos, worth about $5 billion, for a mere $310 million, and how Boris Berezovsky got Sibneft, another oil giant, worth $3 billion, for about $100 million.

When it came to dealing with the oligarchs, the government was generally unable to exercise much control. Since the state was very weak, these "new Russians" paid little or no taxes on their purchases. And if most American robber barons had at least created something out of nothing, the Russian oligarchs added nothing to what already was something. Virtually all their wealth came from the seizure of Russia's raw material assets, which until 1992 had been owned and managed by the state. An oligarch's success, in other words, almost always depended on his connections to the government officials in charge of privatizing the country's rich energy and mineral deposits, as well as on his ability to outmaneuver or intimidate rivals. (Two senior Yukos executives have been charged with murder and attempted murder, and the mayor of Nefteyugansk, where Yukos' major producing unit is headquartered, was murdered after criticizing the firm's failure to pay taxes.)
By the time Putin succeeded Yeltsin in 2000, there was much to remedy. One of Putin's first steps was to declare a change in the rules of the game. As he put it in a meeting with the oligarchs in February 2000, "It is asked, what then should be the relationship with the so-called oligarchs? The same as with anyone else. The same as with the owner of a small bakery or a shoe repair shop." That Putin said this at a special meeting with the oligarchs and not with a group of bakers or cobblers is beside the point; the statement was taken as a signal that the tycoons would no longer be able to flout government regulations and count on special access to the Kremlin. In July of that year, Putin told the oligarchs that he would not interfere with their businesses or renationalize state resources as long as they stayed out of politics-that is, as long as they did not challenge or criticize the president. Although the promise provided some reassurance, it also displayed a warped concept of how markets, businesses, and the state are supposed to function in a democracy.

Limiting the oligarchs' political involvement proved difficult. As more people grew richer, some were inevitably tempted to expand their activities beyond business. Several, including Vladimir Gusinsky and Berezovsky, created media empires of television stations, newspapers, and magazines and used these outlets to attack not only each other, but also Putin, particularly for his policies in Chechnya and his inept response to the 2000 sinking of a nuclear-powered submarine in the Barents Sea.

After the Russian government declared a moratorium on the repayment of its debt on August 17, 1998, most Russian banks, including Khodorkovsky's Menatep, simply closed their doors, depriving hundreds of thousands of ordinary Russians of their savings. Rather than try to help depositors and other lenders, Khodorkovsky took whatever sound assets he could salvage and diverted them to a subsidiary in St. Petersburg, beyond the reach of his creditors. After lengthy and often halfhearted intervention by the government, Menatep eventually agreed to provide token compensation; so did Yukos, to those who had taken its stock as collateral for loans to the company. But by the time Khodorkovsky was through issuing new shares and watering down the old stock, few of the banks' depositors or lenders had much to show for their efforts.

Still, it was less Khodorkovsky's financial skullduggery than it was his interference in political matters that upset Putin. Khodorkovsky was reported to have offered Russia's two liberal parties, Yabloko and SPS (the Party of Right Forces), $100 million to unite and campaign together in opposition to Putin and his United Russia Party. And he broadly hinted that he would run for president in 2008, when Putin's term is due to expire.

Khodorkovsky also actively promoted legislation that would benefit Yukos. It was said that, to ensure such support, he bought control of as many as 100 seats in the Duma (the lower house of the Russian parliament), including several held by members of the Communist Party. Whether the rumors were true or not, he was able to head off attempts by the Duma to increase taxes on petroleum producers in 2001 and 2002.

Such heavy-handed lobbying is hardly unknown in the U.S. Congress, especially on energy matters, but to Putin it represented a violation of the deal he had offered the oligarchs. The siloviki, the law-and-order types from the KGB, the police, and the army that Putin had been bringing into the government, felt the same way. Khodorkovsky's methods were a fundamental challenge to their control of the country-or, as one noted, "a danger and threat to the Russian state."...>

http://www.foreignaffairs.org/20041101faessay83604/marshall-i-goldman/putin-and-the-oligarchs.html

[skyounkin]

3. It's always someone elses fault......

[Dover]

5. Or perhaps Spitzer DID have something to do with it.

And who's to say whether their demise was intentional or not? Another thread in this forum
links that company to Carlyle. So who knows.

It would be interesting to learn more about this back story to AIG's problems.

[ColbertWatcher]

4. Of course. who else could it have been? The GOP is filled with morans ...

... or, do they just think we're the ones who are stupid?