If taxpayers want American International Group Inc. to pay them back, it should let the company get back to business.
C.V. Starr & Company Inc., New York, a company led by Maurice Greenberg, the former chairman of AIG, New York, (NYSE:AIG), makes that argument in a press release responding to reports in The New York Times and elsewhere suggesting that C.V. Starr has been hiring valuable employees away from AIG.
“Over the last year, we understand that a number of AIG’s 100,000 plus employees have left A.I.G. to join the company’s direct competitors in the global property and casualty and life insurance businesses,” C.V. Starr says. “Only 13 of those employees have joined C.V. Starr & Company Inc., which was formed in 1950 and focuses on highly specialized insurance lines; far more, we believe, have joined other, larger companies.”
Employees are leaving AIG because of the U.S. government’s approach to overseeing AIG, C.V. Starr says.
“Shortly after AIG first received federal assistance in September 2008, the then-Treasury secretary went on ‘Meet the Press’ to announce the Bush administration’s intention to “‘iquidate’ AIG,” C.V. Starr writes. “A successful liquidation, however, has proven impossible in the present economic climate, since buyers for AIG assets at fair values simply do not exist at this time. Fire-sale prices are bringing taxpayers, who now own almost 80%of AIG, only pennies on the dollar for their investment in AIG.”
The government’s approach also has ignored the value of AIG’s people, C.V. Starr says.
“Since the day the Treasury Department announced its plan to liquidate AIG, value has been destroyed because AIG’s people and their relationships — AIG’s business — are heading for the exits,” C.V. Starr says. “The evidence is overwhelming and indisputable that the American taxpayer is an investor in a steadily diminishing asset as a result of this failed approach.”
Instead of trying to liquidate AIG, AIG should have a shot at operating like a normal business and earning the money necessary to repay the American taxpayer, C.V. Starr says.