From the July/August 2008 Issue
C.V. Starr’s Hank Greenberg on Eliot Spitzer, Iranian leader Mahmoud Ahmadinejad, and the economy.
Maurice R. “Hank” Greenberg is CEO of C.V. Starr & Company, a private global investment firm headquartered in Manhattan. The company was named after its founder, Cornelius Vander Starr, who also founded the insurance giant American International Group (AIG), which Greenberg headed for 38 years. In 2005, at the age of 79, Greenberg resigned from AIG after being accused of fraud by then New York Attorney General Eliot Spitzer. Greenberg spoke to THE AMERICAN in March, on the same day that Spitzer resigned as governor of New York.
What is your response to the resignation of Eliot Spitzer?
He said that his targets would be strengthened by his investigations. Do you think it has worked out that way at AIG or Marsh & McLennan?
I think most of our readers do not recognize the name C.V. Starr & Company. Could you tell us about it?
Are the insurance operations themselves mainly in China?
Give us an idea of its size in assets.
During World War II, you were in the invasion of Normandy and you were among the liberators at Dachau. How have events like that affected your life and your business career?
When the war was over and I came back, I went to finish high school, went to college and law school, and was recalled during the Korean War and spent about a year in Korea.
I had a lot of military experience and it taught me many things. Obviously, discipline, leadership qualities, and courage; the idea that you should never ask anybody to do what you won’t do yourself; and that you should look after your people. These are things that you need in running a business as well.
How would you compare where the U.S. economy is now to other periods of slowdown that you have seen in the past?
The subprime problem is the outcome of a very loose credit policy and an abdication of risk analysis and control.
And then the development of products that were so esoteric that few knew what they were doing, including some very sophisticated firms. Whether it was credit default swaps, CDOs [collateralized debt obligations], and so on, it led to excesses. There is nothing in history that compares with that.
Going deeper, we have inflation that is building in food products, which is a serious issue. We are converting agricultural land to grow biofuel crops—which, when you look at it closely, we don’t save a thing in energy by doing that. We are doing the wrong thing at the wrong time.
Then you have the banks de-leveraging their balance sheets, the Fed pumping $200 billion in and swapping treasuries for subprime assets on a rollover basis. Are these things going to stimulate the economy enough so that growth begins again? I’m uneasy.
Is there anything specifically that you think can be done from a public policy point of view to get things moving again?
Are there other areas of public policy that you and your company are specifically concerned about?
In 2006 you attended a luncheon where Iranian leader Mahmoud Ahmadinejad was present and he posited that the Holocaust was fiction. How did you respond?
There were thousands of Americans and British and French and Germans who all saw, and that was only one of many concentration camps. So to believe anything like that is trying to distort history. It’s just an outrage. And he just responded by saying “How old are you?” Then he changed the subject.
Photograph by Marc Asnin/Redux Pictures.