THE STASH MARCH 27, 2009
Among the many reactions to the resignation letter former AIG-FPer Jake DeSantis published in the Times this week was skepticism that DeSantis had nothing to do with the characters who destroyed his company. (DeSantis wrote: "I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P.") A lot of people (including some Stash commenters) thought this was, if not technically untrue, then a little convenient for a guy who worked down the hall from all the bad apples (figuratively if not literally). I guess the thinking is you're not blameless--or at least you have nothing to whine about--if you spent years working alongside the people whose actions did you in and were basically aware of what they were up to.
I'm not really out to rebut this view. But it might be worth providing some context: While wrapping up a piece yesterday, I spoke with a former AIG-FP employee who had some interesting insights on DeSantis's corner of the company. It turns out DeSantis worked in a part of AIG-FP that was once called AIG Trading Group, and which for years had actually been a separate unit unto itself. Even more interesting, the two units performed a handful of similar functions and periodically fought over turf. The turf-battle was intense enough that AIG-FP's founder and first CEO, Howard Sosin, often argued that AIG Trading should be folded into his unit.
That never happened while Sosin was around. But a year or two after the infamous Joe Cassano took over as CEO of AIG-FP in 2001, AIG-FP finally won the institutional battle and absorbed its longtime rival.
What's the point of all this? My guess is that a lot of the people who came over to AIG-FP when it absorbed AIG Trading were never super happy about the arrangement. Personnel-wise, the absorbed group was actually much larger than the absorber, so it was probably doubly frustrating--like being ruled by some rump colonial power. And when you further consider that it was some of the original AIG-FP people who placed the bets that brought everlasting shame to the unit--well, you can understand the frustration of the people who'd been merged into it unwillingly.
As I say, that's not necessarily a rebuttal of the argument that DeSantis and his colleagues deserve some blame, but it does complicate the picture a bit.
P.S. Apologies for the light posting these last few days. I was crashing on the piece I alluded to above, which should be out Monday.