To say that Hank Greenberg's escalating lawsuit against the US government for bailing out AIG during the financial crisis is mystifying would be a gross understatement.
When I first read about the suit, I was amazed and confused. Who in their right mind would do this? Now, however, I am beginning to feel resentful, and I will tell you why in a moment.
First, let's recap:
- Businessman (Greenberg) creates insurance company (AIG), which grows into a giant;
- Greenberg pushes AIG to enter complex financial products arena for bigger profits;
- Greenberg leaves but has set the ball rolling for what will happen next;
- AIG uses derivatives to insure highly risky mortgage-backed securities;
- Mortgage payers default, securities are worthless, and AIG is on the hook for billions;
- AIG teeters on verge of bankruptcy and turns to government for lifeline;
- Government bails out AIG for its self-created mess, justifiably imposes tough terms;
- Greenberg thinks he should have gotten paid despite AIG's bad bet and his own role in laying the groundwork for it, and sues the government.
In other words, Hank Greenberg gambled, lost, and now wants his money back.
All that aside though, why is he suing the government? Greenberg is a very smart man; I don't agree with his actions, but he is still smart. He cannot possibly believe that any court will award him damages in this case. Moreover, the government has no reason to settle because public opinion is firmly on its side; except for Greenberg's closest allies, I doubt many people sympathize with him. Then why waste energy and money on a pointless lawsuit that you can't win?
The only possible answer is ego. Greenberg hates losing and wants to blame someone for it. This is an exercise in revenge, pure and simple. And while it is clear that he blames the US government, perhaps he also wants revenge on the American people, for this lawsuit of his - no matter how frivolous - will cost the government millions of dollars to fight, and that of course will come from the pockets of taxpayers.
Taxpayers like me.
I don't care if Greenberg wants to sue God. It is a free country and he can do what he wants. But I do care when someone tries to reverse the consequences of their own bad decisions by using up the resources of my government - and sticking me with the bill. I care even more when this is on top of the untold damage that AIG and others who facilitated the subprime mortgage mess did to our economy!
Greenberg may believe that he is right, but this is not gay marriage or equal pay or some noble cause that he is suing for. It is about his personal fortune and that is his own problem, not mine. I work hard for my money and when I pay taxes, I want that money to be used for something worthwhile and certainly not for fending off sore gamblers.
It may not be a large amount, maybe just a few cents, that will come from my share of taxes, but it's still money. Accordingly, Hank Greenberg is welcome to continue pursuing his bizarre lawsuit, but the least he can do is mail me a check.
SANJAY SANGHOEE has worked at leading investment banks Lazard Freres and Dresdner Kleinwort Wasserstein as well as at a multi-billion dollar hedge fund. He has an MBA from Columbia Business School and is the author of the financial thriller "Merger" (available below) which Chicago Tribune called "Timely, Gripping, and Original". Please visit his Facebook page 'Candid Politics & Business Blogs'.