Financial mogul Maurice Greenberg presides over a vast and expanding insurance empire. Meanwhile, he consorts with and lobbies for the barbaric Communist regime in Beijing.
Maurice R. "Hank" Greenberg leads a charmed and busy life. As chairman and CEO of one of the world's largest insurance and financial conglomerates, American International Group (AIG), Greenberg sits atop a very profitable and powerful empire. He dines with presidents and potentates and sups with the likes of Federal Reserve Chairman Alan Greenspan, global "wise man" Henry Kissinger, and chairman-of-the-world emeritus David Rockefeller. The New York-based magnate appears equally at home with the commissars of Communism, counting China's premier, Zhu Rongji, and president, Jiang Zemin, as longtime friends.
Business has been very good for AIG. Greenberg's "Letter To Shareholders" in AIG's Annual Report 2000 noted:
AIG started the new Millennium on a positive note. Net income rose 11.5 percent to a record $5.64 billion, while earnings per share totaled $2.41, an increase of 12.1 percent over 1999.... [N]et income gained 14.8 percent to $5.74 billion, or $2.45 per share. In addition, Revenues gained 13.1 percent to $45.97 billion; Assets rose 14.3 percent to $306.58 billion; Shareholders' equity reached $39.62 billion at year-end, compared to $33.3 billion at year-end 1999; and Return on equity was 15.6 percent.
Behemoths the size of AIG have voracious appetites -- and deep pockets. So, over the past few years, Greenberg has led the company on a worldwide acquisition binge. Some of the firms devoured by AIG include the Los Angeles-based financial services company SunAmerica, Inc. ($18 billion), the Hartford-based HSB Group ($1.2 billion), Egypt's Pharaonic Insurance Company ($18 million), the financial units of Korea's Hyundai Group ($860 million), the Canada-based Norwich Union Holdings, Ltd ($159 million), and the Chiyoda Mutual Life Insurance Company of Japan ($522 million). Most recently, Greenberg received accolades from Wall Street and the investment community for his August 29, 2001 acquisition of American General Corporation (for $23 billion).
Powerbroker
Like many other ultra-wealthy business tycoons, Hank Greenberg sits on the boards of philanthropic, cultural, medical, educational, and civic institutions and ladles out large sums of personal, corporate, and foundation funds to numerous causes. Few corporate moguls, though, can match Greenberg's political clout and connections.
Greenberg is chairman of The Asia Society, the Starr Foundation, and the Nixon Center, as well as the founding chairman of the U.S.-Philippines Business Committee and past chairman of the U.S.-China Business Council. He is vice-chairman of both the U.S.-ASEAN Council on Business and Technology and the Center for Strategic and International Studies, and has long been a major force in The Business Roundtable and the President's Advisory Committee for Trade Policy and Negotiations. He is also a member of the Board of Directors of the New York Stock Exchange, a member of the Trilateral Commission, a director of the United Nations Association, and the past chairman, deputy chairman, and director of the Federal Reserve Bank of New York. President Clinton appointed him to the Advisory Committee of the President's Commission on Critical Infrastructure Protection.
Greenberg, however, wields far more power in a role far less publicly visible than those mentioned above. As vice-chairman of the Council on Foreign Relations (CFR), he enjoys the cachet of being the Number 2 man (behind CFR chairman Peter G. Peterson) in what the Washington Post's Richard Harwood has called "the nearest thing we have to a ruling establishment in the United States." In a similar vein, author/columnist Richard Rovere (a CFR member) once aptly described the Council as "a sort of Presidium for that part of the Establishment that guides our destiny as a nation." The elite membership of the CFR presidium does indeed constitute the "ruling establishment" of the United States, and CFR chiefs like Greenberg take seriously their self-appointed role to guide "our destiny as a nation."
Chinagate
As a man who guides "our destiny as a nation," Greenberg's role in events that have undermined our security and sovereignty is frightening. He is generally recognized as the leading voice of the "Red China Lobby" in the U.S. business and financial communities. The multi-billionaire chairman of AIG, working closely with Henry Kissinger and other CFR-Trilateral Commission heavyweights -- both inside and outside of government -- has helped craft the disastrous policies that have built the People's Republic of China into a modern economic power, transferred critical military technology to the People's Liberation Army, and enabled Beijing's agents to subvert our political system and compromise our national security.
Greenberg's name never surfaced during the many Clinton bribery and security scandals known collectively as Chinagate, but it should have. While executives of Hughes Electronics, Loral, McDonnell-Douglas, COSCO, and the Lippo Group were the subjects of daily headlines and congressional investigations, Greenberg skated free of the investigatory search lights. What's more, he almost certainly played a key role in the high-level, high-pressure campaign by U.S. business and policy elites to greatly limit the congressional investigations into the PRC's U.S. political campaign contributions, its acquisition of America's satellite and missile technology, and much, much more. These elites made sure that any public outrage resulting from exposure of their treachery would be neutralized and misdirected into ineffectual actions.
A major focus of concern in the Chinagate scandals was the illegal activities of principals associated with the Riady family and their Indonesia-based conglomerate, the Lippo Group. Lippo, as investigations by Congress and the press revealed, is closely tied to Communist China's military and intelligence. Greenberg and MG, as we shall show, also are closely tied into Beijing's military-intelligence complex and have long been connected to Lippo and Bill Clinton's financial misdealings in Arkansas. Lippo and AIG, however, are now formally married. Greenberg reported to shareholders last year: "During the fourth quarter [of 1999], we also entered into an agreement to purchase a 70 percent equity interest in a subsidiary of LIPPO LIFE, Indonesia's leading life insurance company. The new joint venture, renamed AIG Lippo Life, is the largest life company in Indonesia, marketing life, pension and health products through a multi-channel distribution network...."
Like Lippo billionaires James and Mochtar Riady, Greenberg has close ties to the top echelons of the Chinese Communist Party. Among other things, the AIG chief actually sits on the International Advisory Board of China International Trust and Investment Corp. (CITIC), one of Beijing's top corporate intelligence operations against the U.S. and the West. CITIC is run by Wang Jun, a Clinton White House "coffee" guest, who was caught trying to smuggle automatic weapons to U.S. street gangs.
The 1999 report of the House Select Committee on U.S. National Security and Military Commercial Concerns With the People's Republic of China noted that CITIC has been involved in many illegal activities in the past involving U.S. national security. The report states:
In 1996, Hong Kong Customs officials intercepted air-to-air missile parts being shipped by CATIC [China National Aero Technology Import-Export Corporation], aboard a commercial air carrier, Dragonair. Dragonair is owned by China International Trade and Investment Company (CITIC), the most powerful and visible PRC-controlled conglomerate....
The report also noted another CITIC-CATIC joint operation to acquire U.S. aircraft manufacturing technology and access to other aerospace firms through the purchase of an interest in MAMCO Manufacturing, an aircraft parts manufacturer in Seattle.
Joining Greenberg on the CITIC board is the infamous Li Ka-shing, whose Hong Kong-based company, Hutchison-Whampoa, Ltd., has served as Communist China's principal instrument for gaining control of the world's strategic ports and waterways, including the Panama Canal. His CITIC connection alone qualifies Greenberg as a PRC "agent." But there is much more. In 1995, for example, Beijing's Communist mayor, Li Qiyan, announced the appointment of Greenberg as the Chinese capital's first "senior economic advisor." Commenting on the appointment, the Chinese Finance Association noted that "Greenberg has long enjoyed favor in China. AIG was the first foreign insurance company permitted to operate in China."
Greenberg returns the favor; he was one of Beijing's most vigorous and influential arm twisters in Congress for Permanent Normal Trade Relations (PNTR) status And he is now leading the charge for China's membership in the World Trade Organization (WTO). He has been particularly successful in Republican, business, and "conservative" circles.
The MG magnate is a member of George W. Bush's elite "Pioneer" club of donors who contributed $100,000 or more to his presidential campaign. Bush showed his appreciation by appointing a key Greenberg associate, Elaine Chao (a fellow CFR member), as secretary of labor. Chao is the wife of Republican Senator Mitch McConnell of Kentucky, an avid China booster who has received generous campaign donations and speaker fees from AIG.
Greenberg, a major donor to the Heritage Foundation, used his influence to place Chao on one of the think tank's advisory councils. From that vantage point, she engineered the firing of China critic Rick Fisher, director of Heritage's Asian Studies Center. Last year, when Heritage issued a paper warning that normalizing relations with the PRC posed serious national security issues, Greenberg threatened to yank his funding. Heritage capitulated and put out a new report, "How Trade with China Benefits Americans." The Greenberg influence was also evident when Heritage officer Kim Holmes (a CFR member) was featured in the CFR's annual report, praising the Council's "cutting edge" programs and reports on China, North Korea, and Cuba.
Some China watchers have compared Greenberg to the late Armand Hammer, the Soviet agent and billionaire chairman of Occidental Petroleum, who greatly assisted Communist leaders from Lenin to Gorbachev. The resemblance is striking -- and the implications are frightening.
NPR Special
03-15-2005
Analysis: AIG CEO Maurice "Hank" Greenberg resigns under pressure
Host: MADELEINE BRAND
Time: 4:00-5:00 PM
MADELEINE BRAND, host:
Back now with DAY TO DAY. I'm Madeleine Brand.
Maurice "Hank" Greenberg resigned under pressure today after nearly four decades as CEO of the world's largest insurance company, AIG. He's just the latest in a string of high-profile departures from the corner office. Joining us from the "Marketplace" newsroom in Los Angeles is Tess Vigeland.
And, Tess, why is Greenberg leaving?
TESS VIGELAND ("Marketplace"): Well, this is part of the ongoing investigation of the insurance industry that New York Attorney General Eliot Spitzer has had under way since about last fall, looking into whether insurance companies were rigging the system by which they got corporate clients and possibly taking kickbacks. AIG was one of the initial targets of that investigation, as was, by the way, Marsh & McLennan, where Greenberg's son Jeffrey was CEO; he was ousted several months ago. And now, just before he was scheduled to be deposed in Spitzer's office, Hank Greenberg stepped down from the CEO position at AIG, and he will stay on, though, as chairman.
BRAND: You know, he's not the only CEO who has had to leave recently. What's going on with this?
VIGELAND: Well, in fact, the numbers are pretty stunning here. In February, more than a hundred CEOs left or were forced out of their companies, and that's the highest turnover level in four years. In January there were almost that many. And if we look at just the last few weeks, we've seen a raft of departures of really high-profile people: Carly Fiorina at Hewlett-Packard; Harry Stonecipher at Boeing; over the weekend, of course, Michael Eisner at Disney. And the CEOs at Saab, QUALCOMM, DirecTV and Riggs Bank have all left. A couple of months ago Franklin Raines got the boot from Fannie Mae. So, yeah, you'd have to say this is a trend.
BRAND: And so what's prompting all these resignations?
VIGELAND: For the most part, the experts say that this is part of the ongoing ripple effect from all those corporate scandals and Sarbanes-Oxley and the Spitzer investigations. John Challenger of the outplacement firm Challenger, Gray & Christmas says CEOs that used to get away with certain things just can't anymore.
Mr. JOHN CHALLENGER (Challenger, Gray & Christmas): All employees are set to a very high standard. CEOs more than anyone else, because of the extraordinary pay that they receive, just don't have much chance for failure. Too many wrong decisions and that CEO is out.
VIGELAND: And a lot of this has to do with corporate boards that just aren't as much of a rubber stamp as they used to be, and that's because they, too, as well as the CEOs, are being held accountable by the likes of Spitzer, the SEC and even juries for what their CEOs do.
And today in the MARKETPLACE newsroom, we're looking at what today's conviction of former WorldCom CEO Bernard Ebbers means for all the folks who are still in the corner office.
BRAND: Tess Vigeland of public radio's daily business show "Marketplace" joins us regularly at this time for discussions about money and business. "Marketplace" is produced by American Public Media.
Thanks, Tess.
VIGELAND: Thank you.
