Even after three tries, bean counters at American International Group still can’t untangle its labyrinthine finances secreted mostly in the brain of founder Hank Greenberg.
The giant insurer – a target all year of probes into securities violations and fraud allegations – said yesterday it needs more time to present a true picture of its latest profits.
It estimated in filings they were pretty good, about $1.7 billion, but can’t be sure. The profits developed between June and September despite losses of $1.03 billion on Hurricane Katrina and about $200 million on Rita.
The company said it’s still struggling to sort out earnings going back five years, in which the company admitted it bloated its profits by $3.9 billion, creating a phantom dime on every dollar of profit.
Earnings reported yesterday might have added up to $500 million in phantom profits, but even that’s not certain.
Greenberg, 80, was legendary for carrying his huge business empire and its interlocking math in his head for four decades. In recent years, the New York Insurance Department forced him to file at least a roadmap of the empire – the first ever such disclosure. The document, about the size of a tablecloth, shows a maze of 809 separate companies, with finances entwined.
Greenberg was forced out as chairman and CEO of AIG this summer at the peak of probes by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission.