Chapter 6

Raising the Iron Curtain

In March 1968, the Central Intelligence Agency (CIA) found out that the Soviet Union’s military had lost a nuclear submarine, the K-129, in the Pacific Ocean about 750 miles northwest of Hawaii. The Soviets did not know exactly where the sub was, but the Americans did. The K-129 carried nuclear weapons, codebooks, cryptology, and other Soviet technological secrets of great value to the American side in the Cold War. The CIA devised a covert operation to retrieve the sunken sub and its valuable cargo from the bed of the Pacific, 15,000 feet deep.

The CIA commissioned the private shipping company owned by Howard R. Hughes, the eccentric industrialist, to build a specialized vessel for the top-secret recovery. Called the Glomar Explorer, the vessel cost several hundred million dollars (more than a billion dollars in today’s terms). The Glomar Explorer was tailor-made to travel stealthily from the West Coast of the United States out to the depths of the distant North Pacific, regularly patrolled by Soviet naval ships. Built to appear designed for deep-sea mining research, the vessel was constructed with a massive storage hold in its middle and outfitted with elaborate cranes.

No one, especially not the savvy Hughes, would undertake such an expensive clandestine mission, an audacious underwater feat, without insurance. But few insurance companies would agree to underwrite such unusual risks, likened to the same period’s exploration of space and the moon landing, or to keep the venture strictly confidential.

Hughes and the CIA turned to AIG. To arrange the insurance contract, Greenberg hosted a meeting in his New York apartment, gathering Lawrence R. Houston, general counsel of the CIA, and senior executives from Hughes’s company. Within a few hours, they agreed on the principal terms, and within days, their lawyers finalized a comprehensive maritime insurance contract that enabled the recovery mission to proceed.

In early 1974, Greenberg was in Hong Kong chairing an AIG board meeting when a secretary interrupted with an urgent phone call. A senior U.S. government official informed Greenberg that the Glomar Explorer story had leaked to the press. The Los Angeles Times was about to go public with it. At that, Greenberg reported on the project to the board. The story ran but did not name AIG.

It was never revealed what assets the United States recovered or how much their value had been compromised by the media leaks. But one thing was clear: AIG had played a pivotal role in an important matter of national security.1

The Soviet Union was among the more perplexing places where AIG and its forerunners operated. Greenberg’s first glimpse into the Soviet bloc was in 1964 during the Cold War, just after he had begun working at C. V. Starr & Company. He and John Roberts took a trip to Moscow. Greenberg had read an article in an insurance journal reporting that the Soviet state insurance company, Ingosstrakh, provided automatic insurance coverage to travelers on the country’s transport systems.2 Greenberg perceived an opportunity to get a foot in the door of what he thought could become a large insurance market: reinsuring Ingosstrakh to relieve the company of some exposure.

Greenberg and Roberts obtained government clearance from both sides of the Iron Curtain to make the trip. Arriving by plane in Moscow, both men got a strange feeling from the airport’s bleak and tense atmosphere, sensing that they were crossing enemy lines.

Driving in from the airport, as they passed through Lubyanka Square, the government-appointed escort, sitting in the front passenger seat, eyed the Americans in the mirror and, with a cockeyed grin, asked, “Do you know what that building is?”

“No,” Greenberg said.

“But you must recognize it from your training program,” the escort said mischievously.

Looking up at, and recognizing, the imposing KGB headquarters, Greenberg played along. “It looked different,” he quipped.

The Soviet government put its guests up at the Rossia Hotel, the prison-like fortress where all foreign business executives stayed in those days in order for the government to keep close watch on them. The restaurant’s menu boasted a rich array of wonderful dishes, none of which were actually served. When ordered, waiters told patrons Nyet—“No,” signaling not that the restaurant was out of the item, but that it was never offered. Diners were left with an unmemorable choice of typical but cheerless dishes—borscht and black bread perhaps.

During the next day’s business meeting about Soviet travelers’ reinsurance, both sides kept the conversation playful. While discussing the proposal with one official, Greenberg noticed a photograph on his desk displaying a building in Havana, Cuba.

“That looks like the building where my company housed our Cuban operations,” Greenberg said, “before we pulled out on the eve of Fidel Castro’s revolution in 1960.”

“That may be,” the official replied. “Now it is the building where Ingosstrakh houses the Soviet Union’s Cuban operations.”

“Please take care of that building,” Greenberg said. “We will get it back—soon.”

Though Greenberg’s prophecy remains unfulfilled, and he did not then obtain the Soviet travelers reinsurance business, the visit opened the door to Russia. American Home wrote an insurance policy covering the July 15, 1968, inaugural flight of Aeroflot from Moscow to New York and formed a joint venture to offer insurance to U.S. and European tourists visiting the Soviet Union.3

AIG executives habitually tried to anticipate world events and prepare to respond to them. Roberts tried to imagine what would happen if and when the Cold War ended. With this quest to “look around corners,” Roberts supervised a team of young colleagues to develop new business in eastern Europe, behind the Iron Curtain. The team branded this new mission the Socialist Countries Division and established headquarters in Vienna.4

An early trip took them to Moscow, where their hosts included contacts at Ingosstrakh, the state insurance company Greenberg and Roberts had met on their first trip in 1964. They visited with executives from an American International Underwriters (AIU) client, Cleveland Crane Company, which was building a factory in Russia. Cleveland Crane had insurance contracts with both the AIU and Ingosstrakh. Using that as an opening for more direct business, Roberts persuaded his counterparts to sign a contract in which the AIU reinsured the risk Ingosstrakh had taken. Though the deal was not much in size or scope, AIG had established another valuable contact in the Soviet Union. Few foreign companies enjoyed that access, which would pay dividends as the Iron Curtain rose.

Roberts discovered that construction projects behind the Iron Curtain were essentially self-insured, though officials did not think of it that way. For example, the Hungarian government borrowed $50 million abroad to build a local factory. When the factory was totally destroyed by a fire, the state insurance company transferred $50 million to the state construction company to pay the loss. But the government still needed to repay the foreign lending market and borrow another $50 million. Roberts persuaded the Hungarian project managers that this practice was a mistake. His team argued that if the state was going to borrow foreign money to build, it should insure these projects externally as well—using the AIU. Ensuing discussions were halting, intermittent, and inconclusive, but the AIG team kept talking with the Hungarians and other eastern Europeans anyway, for the chance of future business; that chance would come, even before the West won the Cold War.

In the late 1970s and early 1980s, across eastern Europe, Roberts detected small changes in many capitals, signs of an increasing interest in private enterprise as an alternative to Soviet-style communism. Particularly in Budapest, Hungary, Roberts noticed the gathering groundswell: restaurants were starting to develop and were allowed to make money, rather than just participate in a pool; taxi drivers were beginning to earn their own income rather than having to share it with other cab operators.5 Across eastern Europe, AIG managers encountered many pioneers, from the East and the West, seeking to trade, whether in insurance and other services or goods and manufacturing. They cultivated relationships with business entrepreneurs eager to do deals, and increasingly with diplomats and political figures who had open minds about open markets.

AIG’s efforts led to high-level meetings, one of which brought Greenberg together with the president of Romania, Nicolae in May 1982. A Romanian insurance commissioner had encountered Greenberg at a conference in Manila, where he debated the merits of different kinds of insurance companies: Greenberg argued for the corporate form, owned by shareholders, while his opponent argued for the mutual form, owned by policyholders. Intrigued by the corporate form—then alien to Romania—the commissioner invited Greenberg to visit Romania and meet government officials. At the airport, the insurance commissioner who greeted Greenberg surprised him by saying that President wished to see him right away. , a self-declared “ambassador for world peace” then at the height of his powers, had instructed deputies to treat the event as equivalent to a state meeting. They seated the two men in oversized chairs opposite each other, in a cavernous room at the presidential palace. Several AIG executives and numerous Romanian government officials looked on as television cameras captured the proceedings.

asked Greenberg: “Why is the West pointing ballistic missiles at the East?”

Posing such a question of political and military strategy to a businessman was unusual. But it was the kind of topic Greenberg thought about often and understood.

“When the East stops pointing ballistic missiles at the West,” Greenberg replied, “the West will stop pointing them at the East,” marking a standoff that mirrored the tough stubborn stances taken by both sides in the Cold War.

The two canvassed headline subjects of the day. Besides war and peace, they debated forms of government and principles of international economics and trade. quizzed Greenberg on his business interests in eastern Europe. Greenberg explained the efforts of AIG’s Socialist Countries Division to develop reinsurance projects in selected nations, including Romania. By the end of the conversation, had warmed to Greenberg. Afterwards, as Greenberg walked around Bucharest, then a dark capital city, he imagined the vast possibilities that lay ahead for the country.

The Socialist Countries Division opened doors for AIG executives to have discussions with top officials in Hungary and Poland in addition to Romania. Three of the larger countries in the Warsaw Pact, Roberts envisioned a four-partner company—with each country a partner—to provide reinsurance in all those countries. But squabbling complicated that, as the Romanians and Poles each insisted on holding the largest percentage. Roberts improvised a creative solution. He formed three separate companies, one for each country to own; he then created an AIG partnership with each one and tied the network together by a new agency called the “European American Underwriting Agency in Vienna.” The deal was signed, and the companies—called Romanian American Managers, Hungarian American Managers, and Polish American Managers—became affectionately known within AIG as RAM, HAM, and PAM.

The agency’s portfolio grew to include not only reinsurance of commercial risks in each country but primary insurance covering a wide range of specialty risks, in fields as diverse as aviation, construction, and marine. It continued to face challenges, such as reprisals that threatened employee safety during Polish General Wojciech Jaruzelski’s repression of Poland’s Solidarity movement. But it paved the road for AIG to win business in future years, and to nurture the embryonic desire among citizens behind the Iron Curtain for the rewards of private enterprise.

Back in the USSR, in 1978 and 1979, AIG built on its relationships to make another deal with Ingosstrakh (the state insurance firm), to jointly underwrite the insurance for the 1980 Summer Olympics, to be held in Moscow. The plan was aborted, however, as President Jimmy Carter announced that the United States would boycott the Olympics in retaliation for the Soviet invasion of Afghanistan. The executive order also prohibited U.S. companies, including AIG, from participating in the event, putting AIG out of the business.

President Carter viewed the Soviet invasion of Afghanistan as part of a wider regional conflict extending to neighboring Iran, where in early 1979 AIG employees faced a harrowing ordeal that foreshadowed the hostage crisis later that year. In a violent coup, waged in the name of Islam, a flock of mullahs seized control of Iran, deposing Mohammad Pahlavi, the shah, a U.S. ally. After the shah abdicated, the mullahs nationalized AIG’s business.

AIG had established its business in Iran just five years earlier, after the shah had asked David Rockefeller to organize a seminar in Tehran on financial services, a topic just beginning to engage the interest of international officials. Rockefeller invited Greenberg to speak. At the seminar, Greenberg, along with Roberts, met several Iranian executives with whom AIG soon formed a joint venture, called the Iran American International Insurance Company. To run the business, AIG relocated Koshrow C. (“K. C.”) Shabani, a prominent Iranian American working at New Hampshire Insurance Company. His impressive connections in Iran were useful for AIG during the shah’s tenure. The business prospered.

Shabani’s fate changed dramatically with the fall of the shah amid the Iranian Revolution of 1979. Upon nationalizing the joint venture, the Iranians accused Shabani of being a spy for the CIA and asserted that Greenberg was the director of CIA operations in the Middle East. They confiscated Shabani’s passport and put him in a high-security prison under cruel conditions. Twice, the guards told Shabani in the middle of the night they were going to shoot him. They took him outside and blindfolded him. Then they shot bullets into the air, laughed, and returned Shabani to his cell.6 Greenberg was in regular telephone contact with Shabani’s wife in Tehran, using a direct phone link that the authorities could not intercept. He learned that Iranian police had broken into Shabani’s home, where his wife and newborn son were staying. They traumatized the two, picking up the baby by the legs and threatening to kill the boy if the woman interfered with their demands.

From New York, Greenberg worked feverishly on a rescue mission, contacting every U.S. government agency that could possibly help. But after the violent overthrow of the shah, the U.S. government had no useful assets left in the country. Worse, on November 4, 1979, Iranian militants stormed the U.S. embassy in Tehran and took 70 Americans hostage. Despite determined efforts to free them (including a failed attempt at a military rescue), they would be held for the remainder of President Carter’s term, only to be released after 444 days in captivity, once President Ronald W. Reagan succeeded Carter.

AIG was on its own to rescue Shabani. The only thing the U.S. government could do was issue a new passport for Shabani, which, though seemingly a minor detail, was indispensable. Rescuing Shabani would require exiting through a neighboring country by car. No country would admit him from Iran without a passport. AIG worked closely with the many friends it had made in Iran during the period it operated there, and they devised a unique plan of escape.

While the assistants and details must remain secret to protect those who gave aid, Shabani’s release and transport from Tehran was accomplished without paying any bribes. At the border, Shabani and his family were greeted, passport in hand, by R. Kendall (“Ken”) Nottingham, one of AIG’s prominent mobile overseas persons (MOP). The ordeal had inflicted serious pain and suffering, evident from how Shabani’s black hair had turned white. Back in the United States, Shabani resumed living in San Francisco, where AIG arranged for him to have an office and personal assistant for life.7

The Iranian Revolution did not come as a surprise. Shabani had alerted Greenberg to the risk ahead of time. Greenberg offered to remove Shabani to protect his family. Shabani said he wished to stay. Meanwhile, another manager in the life insurance business had not checked in with headquarters. Facing the overthrow, this man, an American, simply cut and ran. When Greenberg learned of his defection, he was furious. Greenberg caught up with him in back in the States shortly afterwards and fired him on the spot.

The upheaval in Iran kept AIG out of the country, while Greenberg and Roberts concentrated on developing relationships with leaders struggling to move their countries out from behind the Iron Curtain. In December 1982, for instance, the Hungarian finance minister, an avid hunter, invited Roberts and Greenberg on a hunting trip outside of Budapest.

Greenberg asked Roberts: “What sort of gift shall we bring for the finance minister?”

“In Hungary,” Roberts observed, “there is a shortage of pretty much everything, so anything would be useful.”

“I suggest hunting gear,” Greenberg said, “perhaps some shotguns, rifles, and ammo.”

Roberts and Greenberg procured those gifts and, along with their own munitions, cleared all the gear through customs in preparation for their flight into Budapest. Inclement weather required rerouting all Budapest-bound flights to Vienna, not far away, though on the western side of the Iron Curtain. After landing, Roberts and Greenberg loaded up a rented car and began their short journey back toward the Hungarian border.

Reaching the crossing at about 9:00 P.M., passports and other papers all were in order and the guard was about to wave the two through. But then another guard asked to see inside the trunk. As soon as he opened it, he said, “Come with me.”

Greenberg tried to explain that the gear was for hunting, and much of it gifts for the finance minister. He asked the guard to please call the minister. The guard balked, as he considered the two Americans to be highly suspicious. His comrades eventually reached the finance minister and verified the story. Within two hours, the finance minister himself arrived at the border to welcome the two Americans and rescue their belongings.

The hunt the next day was a great success. Roberts nabbed a boar in the morning, and Greenberg shot a stag in the afternoon. The antler trophy, rising some four feet, remains prominently displayed above the fireplace in the club house at Morefar, Starr’s estate in Brewster, New York. Mounted on a simple wooden base, a small metal plaque reads: “HUNGARY 12-7-82 MRG.”

AIG’s early investments throughout eastern Europe began to pay substantial dividends in the years after the Cold War ended and the Soviet Union dissolved. AIG steadily expanded its interests in all three countries where it had gained early footholds—Hungary, Poland, and Romania—using HAM, PAM, and RAM to write policies for multinational corporations doing business there, including Exxon and General Electric. It began general insurance operations in countries throughout the region, including the Czech Republic, Estonia, and Latvia, and developed reinsurance joint ventures elsewhere, including in Uzbekistan.

At an international gathering in Moscow of the U.S.-Russian Business Council in 1987, Greenberg chatted with Mikhail Gorbachev, the last president of the Soviet Union during the 1980s. Gorbachev had overseen the adoption of policies of openness that led the bloc to dissolve and move the former communist states haltingly toward capitalism and democracy. The two men were discussing America’s immigrant history with a small group of other business and diplomatic guests at the Kremlin, a mix of American and Soviet leaders.

“I’m curious,” Gorbachev asked of all the Americans in the group, “where are your ancestors from?”

Each guest answered as they and Gorbachev bantered about the significance of America’s immigrant tradition. When it was Greenberg’s turn, he said, “My great grandmother was actually from Russia.” Expounding on the meaning Greenberg attached to this, he added, “She left this country with little money in search of a better life, and went to America. Two generations later, I have just arrived here in Russia from America on a private corporate jet. Which system do you think is better, the Soviet or American system?” President Gorbachev, though not exactly fond of the Soviet system, could scarcely acknowledge that in front of his Soviet comrades, so instead turned and walked away.

After the Cold War, AIG was eager to build on the relationships executives had developed in Moscow in the two previous decades and opened a representative office there. In 1994, it won a license to operate a full-scale insurance company, the Russian American Insurance Company, as a joint venture with Moscow’s Stolichny Bank of Savings and Garant-Invest.

Russia’s leadership changed after the dissolution of the Soviet Union. In 1991, Boris Yeltsin succeeded Gorbachev as president of Russia. Many in the United States offered assistance in the transition. E. Gerald Corrigan, of the Federal Reserve Bank of New York, advised Russian officials on financial matters. Corrigan in turn drew on the expertise of fellow American businessmen, including Greenberg, then serving on the New York Fed’s board.

Yeltsin was poised to adopt an aggressive approach to economic reform, including the rapid transformation of how resources were allocated. Under this radical approach, however, some dark forces emerged as communist-era apparatchiks became oligarchs grabbing control of large chunks of the economy. Greenberg urged Yeltsin and other officials to take a more moderate approach, one that centered principally on adopting policies that would attract foreign investment into the country. This meant embracing the principles of private property, freedom of contract, and the rule of law. Greenberg believed that it was important to help Russia attract the capital needed to resurrect its collapsed economy, rebuild its eroded infrastructure, and establish a reliable banking system.

Corrigan and Greenberg met with Yeltsin; Russian oligarchs; Yuri Skokov, a leading figure in Russia’s national politics; and such American participants as William B. Harrison, Jr., then vice chairman of Chase Manhattan Bank. Greenberg proposed to create a private investment bank, called the Russian American Investment Bank, to draw foreign direct investment for infrastructure projects. Corrigan championed the Russian-American Banking Forum and the Russian-American Enterprise Fund, both to promote formation of capital to rebuild the country. Meetings took place in the dachas of the Russian elite, country homes in Moscow Hills, outside of the main city. Skokov let Greenberg use a guest house in Moscow Hills next door to where Stalin’s dacha had been.

Over hearty meals of caviar, herring, and sturgeon and prodigious vodka—like night and day compared to the cuisine served at the Rossia Hotel in the 1960s—these men debated the future of the country’s economy: how markets would work, how resources would be allocated, and, of greatest interest to AIG, what foreign businesses would be permitted. As Yeltsin pushed his radical and rapid reforms, a skeptical Duma (parliament) resisted, while oligarchs divided their support. Those at the center of the communist party held a hard line against capitalist tendencies.

The Russian oligarchs supported a bill pending in the Duma that would confiscate the assets of foreign insurance companies and ban them from operating in Russia. The bill’s proponents portrayed foreign insurance multinationals as exploitative capitalists who would cause harm to the Russian people. In a meeting on this subject with the head of the communist party, Gennady Zyuganov, Greenberg changed the narrative.8 He explained that foreign insurance companies had knowledge and expertise in underwriting insurance that would be good for the Russian people. Russian insurance companies, however, controlled by the oligarchs, lacked anything approaching this capability, and would limit the amount and range of insurance for the Russian people.

Zyuganov appreciated this straightforward argument. It changed the way he saw the issue. Foreign competition might be agreeable after all. Though he did not throw his weight behind legislation that would have liberalized rules on foreign ownership and investment, he did the next best thing: he announced that he would neither endorse nor oppose such measures but leave it to the conscience of each participant to decide accordingly.9 At that, the pending confiscatory bill failed to pass in the Duma.

In international business negotiations, Greenberg preferred to make arguments in precisely such terms—what is good for the people of a nation. It was neither necessary nor desirable to make arguments at more abstract levels, such as whether capitalism or communism should be preferred. By thinking along the lines of what is best for a nation’s people, Greenberg supposed that participants would be led to prefer capitalism to other forms of economic and political organization. In any event, Greenberg had put forth an argument for capitalism that even a communist could accept.

These efforts for a private investment bank in Russia, however, came at the wrong time. The rule of law in Russia was simply too vague to support the kinds of commitments inherent in the investment banking relationships that Corrigan and Greenberg envisioned. It was impossible to persuade Yeltsin to support the policies that would attract requisite foreign private investment. Although the oligarchs were enthusiastic about becoming investors themselves, they did not support the kinds of reforms necessary to protect outside investors. The Russian economy stagnated through 1995 and, as erstwhile satellite states of the Soviet Union broke free across eastern Europe, Russia defaulted on its sovereign debts in 1998. The ensuing crisis stoked Soviet-style appetites for order. In 1999, this brought to power Vladimir V. Putin, who reasserted substantial state control over the economy.

Despite the name “Cold War,” the United States and the Soviet Union waged belligerent proxy battles during much of it. One hot spot was Vietnam, where the AIU had been in business for decades, writing a variety of insurance—automobile, fire, marine, and worker’s compensation. Business expanded substantially with the escalation of the Vietnam War in the late 1960s and into the early 1970s. AIG became the primary insurer of the expansive contracting operations that President Lyndon B. Johnson instituted, in which several large U.S. general contractors employed as many as 60,000 South Vietnamese citizens and left Vietnam with the largest number of functioning airfields per capita of any country in the world.10

The AIU provided a key but quiet role promoting U.S. foreign policy. In the battle between the communist North Vietnamese and the U.S.-backed South, military support on the battlefield came from ideologically aligned nations. North Korea aided the communist North Vietnamese, and democratic South Korea gave military support to the South and the United States. South Korea’s alliance with the United States began by supplying noncombat forces in 1964. Then, from 1965 to 1973, the South Korean army sent many thousands of troops into harm’s way for the U.S.-backed South Vietnamese. To contribute this aid, it was important for the government of South Korea to have insurance. It sought coverage for its troops in the case of accidental, noncombat, death. Not many insurers could be employed for such a complex mission. The AIU wrote the coverage.

During the Vietnam War, the AIU insured some of the U.S. vessels that supported troops in the waterways of the Mekong Delta, including boats carrying supplies to forward areas. U.S. naval patrols fought intensely against the Viet Cong and their surreptitious aides, maneuvering in junk and sampan boats along the rivers.11 Amid one treacherous period, the percentage of U.S. supply ships destroyed steadily increased, as did the AIU’s insurance losses. Greenberg, immersed in the details of the battles and related data, was stunned. On a regular trip to the AIU’s Hong Kong office, he had a dinner meeting with colleagues from the AIU and from a Chinese insurance company run by good friends of K. K. Tse. During dinner, Greenberg mentioned this problem and wondered whether the company would be interested in reinsuring these vessels. Tse’s friends were interested, and the two companies struck a deal.

In 1974, the tide in the war turned. Political support for the war within the United States had evaporated, and the executive branch, embroiled by the Watergate scandal, lost authority to sustain the commitment. Communist forces began to infiltrate Saigon in early 1975, putting AIU employees’ lives in danger, as the United States ordered a troop withdrawal.12 Henri Charoui, the Saigon manager, conveyed the concern to an annual meeting of AIU managers in Hong Kong. Saigon was one of the company’s oldest offices, staffed with about 60 people, mostly women and older men. It was a completely Vietnamese staff except for Charoui, who was French and had transferred from the Beirut office. Many had been with the company for a decade or more. In April 1975, communist forces from North Vietnam drove into South Vietnam, targeting Saigon.

True to AIG culture, the managers devised a rescue plan. They dispatched several MOPs to Saigon, including a claims manager, Patrick O’Rourke. Then based in Manila and previously in Beirut, O’Rourke had been in Saigon for his prior assignment handling claims for several years and knew many people there. On April 19, 1975, O’Rourke, along with Peter Hammer and Dick Ritter, both then serving in the AIU’s Hong Kong office, strapped $5,000 in U.S. currency to their bodies, and caught one of the few commercial flights still going into Saigon. There were few planes flying out, but this group hoped to depart with their colleagues on a U.S. Air Force escort; they were also prepared to remain if necessary.

AIG executives in New York prepared a list of personnel likely to be endangered if they stayed in Saigon; they were to be promptly evacuated. Ultimately, six employees and their family members—a total of 27 people—needed saving as the North Vietnamese army marched in. The team arranged for a bus to round up the group from their homes, with Ritter physically hoisting most of them on board, as the driver slowed but did not stop the vehicle. The bus drove to the U.S. Embassy where the families were escorted to the rooftop and into a helicopter that whisked them to a U.S. Air Force jet awaiting at a nearby airfield.

There, Ritter joined the crew for an airlift to the U.S. Air Force base in Guam. The next day, O’Rourke escaped as well, catching an irregular flight first to Manila and then to Guam. The day after that, Saigon fell. In Guam, the 27 evacuees, along with Ritter, were consigned to a vast and chaotic refugee camp where they had to live for several days. O’Rourke contacted Tom Foster, the manager of Guam Insurance Adjusters, the claims office of the AIU agency in Guam. With intrepid cunning, Foster and O’Rourke found the AIU employees, including Ritter, and got them all released safely into their custody. Back in Saigon, the remaining staff kept the office open, and headquarters managed to pay their salaries and benefits.13

Vietnam remained under communist rule for many years, with the country nationalizing the company’s assets. Concurrently with the end of the Cold War, however, reforms begun in the late 1980s softened the central grip, and the country took steps to renew economic growth. Amid that renewal, AIG returned to Saigon, now called Ho Chi Minh City. It obtained a life insurance license in 2000 and a general insurance license in 2005. This is an exquisite example—that AIG repeated in a dozen countries—of a process that recurs when opening international markets: initial prosperity, interrupted by upheaval, followed by eventual reopening for business.

On Tuesday, October 29, 2002, a fierce blaze erupted in the International Trade Center in Ho Chi Minh City,14 a building that hosted many businesses, including a branch and training facility of AIG’s AIA life insurance affiliate there. During the blaze, which raged for hours, the building’s stairways collapsed, leading to the deadliest fire on record in Vietnam’s largest city. All the personnel pulled together, with AIA managers going out of their way to save trainees. Despite efforts, among the dead were 24 AIA personnel and young trainees, some of whom had jumped from the roof to escape the inferno. Many employees suffered from severe burns. Vietnam then lacked the advanced medical facilities or doctors required to treat such critical patients.

From AIG headquarters at 70 Pine Street in New York, Greenberg began making phone calls to help. He arranged airlifts for victims to obtain advanced treatment at specialty hospitals in Singapore and Thailand. For those wounded so seriously as to forbid transporting, AIG flew expert physicians in from Bangkok. To oversee the effort, Greenberg enlisted a medical team from New York–Presbyterian Hospital, which houses one of the world’s most sophisticated burn units, to fly to Ho Chi Minh City. Within 48 hours, senior AIG personnel from around the world were on site providing a full range of needed services—operational, medical, linguistic, and security. Bereaved families received personal support from AIA staff and professional crisis counselors.

Greenberg and his wife, Corinne, flew to Vietnam, along with AIG’s international life insurance executive Edmund Tse, to provide moral support to the victims and their families. On November 16, they attended memorial services for those lost in the fire. Afterward, they visited hospitals where injured employees and trainees were being cared for. They learned both of harrowing escapes—one pair of trainees, a husband and wife, miraculously survived their jump from the roof—and of tragic ends—many lost their lives attempting to flee. Greenberg later met with Le Thanh Hai, chairman of the People’s Committee (the local Communist Party leadership) to express condolences on the human toll of the tragedy.

The victims and their families were moved by Greenberg’s presence. Government officials were inspired by AIG’s humanitarian gestures, which extended not only to AIG’s employees and trainees but to other victims. They were amazed that a CEO of a large multinational corporation would fly across the world and take such a deep interest in the well-being of local personnel. To Greenberg, such actions—which he repeated dozens of times throughout his career, whether responding to typhoons in the Philippines or the earthquake in Kobe, Japan, in 1995—were part of AIG’s corporate culture, the right thing to do.15

With the growth of its global reach, AIG’s MOPs, epitomized by Roberts, had earned a badge of honor. Citizens of the world, they were willing to relocate anywhere AIG needed them. Given the often-hazardous work of building an international business, especially an insurance business, these executives had to have an amazing sense of commitment and creativity and the will to be on the frontier, whatever the personal risk. Assignments often took AIG’s people, especially its MOPs, into treacherous territory. Like soldiers of fortune, they and the company navigated such perils with skill and tenacity. The tenacity meant that the company commanded a presence in these countries when peace followed war and business returned to usual.

As an American company, moreover, AIG and its personnel were natural assets for the United States. AIG’s value to the United States grew as AIG rose from a company of moderate scale in the 1970s to substantial size in the 1980s, and then to among the largest of global companies by the 1990s.16 The alliance between AIG and the United States was clear in the international trade battles of those decades, particularly concerning trade in services.

Notes

1. See Nicholas M. Horrock, New York Times Archives (January 14, 1976). The story of this venture has been recounted in numerous books. Among recent books is Norman Polmar and Michael White, Project Azorian: The CIA and the Raising of K-129 (Annapolis, MD: Naval Institute Press, 2010).

2. The agency’s full name was Upravleniye Inostrannogo Strakhovaniya SSSR (Administration for Foreign Insurance of the USSR). See “American International Groups Expand Business with U.S.S.R.,” Contact (August 1968).

3. Ibid.

4. This discussion draws on Guaazardi, Grose, et al., “Worth the Risk,” chap. 15, pp. 24–28.

5. Ibid., chap. 14, p. 27 (quoting Nicholas Walsh, an employee working for Roberts).

6. A detailed account of a parallel escape from political imprisonment in Iran of this period, involving the company EDS and the leadership of its CEO, Ross Perot, appears in Ken Follett, On Wings of Eagles (New York: Signet, 1984).

7. AIG filed and won a claim against Iran in international court to obtain compensation for the expropriation of its assets.

8. Cunningham interview with Dimitri Simes, Washington, January 24, 2012.

9. Ibid., and Cunningham telephone interview with Simes, March 19, 2012.

10. Guaazardi, Grose, et al., “Worth the Risk,” chap. 15, p. 8 (quoting R. Kendall Nottingham along the lines summarized in this paragraph).

11. See Thomas J. Cutler, Brown Water, Black Berets: Coastal and Riverine Warfare in Vietnam (Annapolis, MD: Naval Institute Press, 2000).

12. Ibid., 8–10. This is based on a contemporaneous report filed by Buck Freeman, speaking one month after the event from Anderson Air Force base in Guam. A variation of the story appeared in Contact magazine.

13. The AIU filed claims for compensation with the U.S. Foreign Claims Settlement Commission. “Taking Risks,” chap. 8, p. 8.

14. See “AIG Responds after a Tragic Fire in Vietnam,” Contact (November/December 2002).

15. Despite the tragedy, AIA’s staff served its policyholders without interruption. Within 24 hours of the fire, the local staff launched the company’s back-up systems located in the nearby Saigon Center. See ibid.

16. Fortune magazine listed AIG as the ninth largest company in the world at the time. Forbes magazine in July 2002 listed AIG as the third largest public company in the world using a composite of sales, profits, assets and market capitalization. See AIG Chairman’s Letter 2002.