Greenberg Pans AIG "Nationalization"

Maurice Greenberg says the Federal Reserve System's move to take nearly 80% of American International Group Inc. in exchange for financing will result in an unnecessary nationalization of the company.

"[I'm] not very happy," Greenberg, the former chairman of AIG, New York, who is still a major AIG shareholder, said Wednesday on the "Charlie Rose Show," which appears on PBS.

"AIG didn't need a bailout," Greenberg said. "A bailout infers you are insolvent, or you need a capital injection. AIG needed a line of credit, a temporary infusion of cash. It did not need capital. What the government did was make $85 billion available, to take down as needed, at roughly 11%, which is okay. In addition, [the Fed took] 79.9% of the equity of the company, and that essentially nationalizes the company."

Greenberg said he believes, from reading press reports, that AIG will sell assets to pay for whatever amounts it draws from the Fed credit facility.

Greenberg said he hopes the core insurance business will not be sold but believes AIG as a whole will be disassembled.

"It will no longer be the company I built," Greenberg said.

Greenberg said he wants to know whether shareholders will have a voice in any decisions made about the company.

Greenberg said he has not been briefed about the Fed deal but expects details to come out soon in a public securities filing.

Greenberg said he still believes that he could have raised the money necessary to keep the company afloat, and that AIG did not need to turn to the government for help.

Greenberg said the company would not be in the position it is in today if he were still at the helm, because he would have seen the current problems coming.

"It has been very painful for me [to see this]," Greenberg said. "I spent a good part of my building this company."

Greenberg said he was "bewildered" by the situation and was at a loss over how the entire situation got out of control as it did.

When asked about his having to leave the company in 2005 under a cloud of controversy about the company's accounting that subsequently led to an earnings restatement, Greenberg said he would never have restated earnings.

"I do not believe there was anything improper," Greenberg said. "What was acceptable in one set of years was not okay in another."

Others in senior management who were forced to leave over the accounting issue also did nothing wrong, Greenberg said.

Greenberg said he has "great confidence in our country."

After a period of some pain and suffering, "we will come out of this okay," Greenberg said.