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Is Benmosche Bringing the Swagger Back to AIG?

By Michael Corkery / Wall Street Journal

It’s August, and deal makers are holed up in beachside mansions and golf retreats around the world. You might think the last thing they would want to do is invite a reporter into their summer house for an on-the-record interview.

Not Robert Benmosche. In recent weeks, the newly appointed chief executive of American International Group has spoken to not one, but two reporters, at his palatial Croatia villa, where he discussed not just AIG, but the features of his swank European pad.

Here’s Reuters description of Benmosche’s Croatian property as drawn from its three- hour interview published late Wednesday:

He bought the stone house (then a “complete wreck” in his words) in 2001 for about $1 million, and has since spent several times that amount in rebuilding the house and gardens. He used many imported materials, including Italian tiles, and added Viking stoves, an 18th century French tapestry, a well-stocked wine cellar and a huge 1922 Persian rug.

The terraces stretch across 160 or 170 feet…of sea front, where he keeps a 135 horsepower boat parked in front.

“Every bathroom is like a piece of art,” he said while showing off his master bathroom with his wife Denise. “Women go wild when they walk in here.” The room had an oversize wall-to-wall mirror, Jacuzzi, large glass-enclosed shower and plenty of natural light.

Did Benmosche not get the memo? With U.S. taxpayers having shelled out billionsof dollars to prop up failing institutions, Wall Street deal makers aren’t supposed to flaunt their wealth. It wasn’t too long ago that Goldman Sachs Group CEO Lloyd Blankfein was reportedly telling his troops to lay low on the conspicuous consumption, amid the populist rage over the bank’s record second-quarter profit.

The heat is even hotter on AIG, which is the subject of a new Michael Moore documentary lampooning Wall Street greed. (The movie trailer depicts Moore being escorted out of AIG’s lobby after informing security guards that he’s come to make a citizen’s arrest of company executives)

Despite the critics, it looks like Benmosche is bringing the swagger back to the Insurer that Greenberg Built. Benmosche told Reuters it was unfair that AIG employees have been blamed for the bail out. “A lot of people have lived in fear because of what I call lynch mobs with pitchforks, ” he said.

But those days are over, Benmosche tells employees, according to Bloomberg. “It’s time the people in Congress stopped talking about you as the problem, because you’re the solution. It’s not your fault, it’s their fault, it’s the regulators’ fault.” (Bloomberg interviewed Benmosche in Croatia on Aug. 20)

Benmosche may not only be trying to rally AIG’s beaten-down work force, he also may be signaling to the vulture investors circling AIG’s assets that he is no distressed seller. Unlike his predecessors, who were looking to unload assets quickly to raise cash, Benmosche says he is willing to wait for the right price.

Gone, it seems, is the parade of AIG executives cowering before Congressional committees. The new face of AIG is a seasoned deal maker in flip flops and khaki shorts waiting to harvest grapes and make wine.