Hank in the Tank

March 13th, 2007 by

Let’s sidestep for a moment the momentous reforms in New York’s workers comp system, and focus instead on some big names in the Big Apple. When Elliott Spitzer began running for governor, he had a long list of people who would never vote for him. AGs make a lot of enemies. At the top of the list, perhaps, was Maurice “Hank” Greenberg, whose long tenure at AIG came to an abrupt end after some spade work by Spitzer and his staff. To add insult to family injury, Greenberg’s son was ousted from Marsh & McLennon after a similar investigation. We can assume that the Greenberg’s money was on “anyone but Elliott.”
Having just conquered the comp demons, Spitzer now finds himself going after another behemoth: New York’s bloated, expensive, and all-too-often incompetent hospital system. Spitzer wrote a letter to hundreds of hospital trustees arguing that “New York’s health care system is broken” and that “New Yorkers pay far too much and get far too little in return” for health care. (Read the letter here.)
If Spitzer ever meets with the hospital folks for a friendly chat, he might well find himself with his favorite beverage in the Greenberg Pavilion of the Cornell-Weill Medical Center on Manhattan’s East Side. That’s “Weill” as in Sandy Weill, another of Spitzer’s targets and “Greenberg” as in Hank Greenberg himself. Greenberg father and son are trustees of New York-Presbyterian Hospital, and one can only imagine their response upon receiving a letter from Mr. Spitzer, in which the governor asks them to “join me as a partner.” I wouldn’t drink anything from that glass, Elliott!
In the Tank
Since his forced retirement from AIG, Hank has not “gone gentle into that good night.” That’s hardly his style. Greenberg continues to churn out positive PR, as should any member in good standing of the Forbes billionaires. In a fascinating article in the Boston Globe by Peter J. Howe, we read that Greenberg engaged the services of an academic spin-control company called eSapience, one of whose senior executives is Richard Schmalensee, the dean of MIT’s prestigious Sloan School of Management. Alas, eSapience finds itself having to sue Hank for failure to pay a two million dollar bill. Chump change for Hank, perhaps, but he probably didn’t get where he is by paying all of his bills.
The suit, filed in US District Court in Boston, exposes the inner workings of academic public relations. It isn’t pretty. Schmalensee charges up to $1,000 an hour to meet with industry leaders at New York power lunches. He and eSapience executives even set up a new think tank, the Barbon Institute, specifically to provide an objective-sounding and credible platform for Greenberg to give the keynote address – at the St. Regis, no less. (Gee, they could have called it the Barbery Institute, in honor of the infamous pirates, or perhaps the Bourbon Institute, in honor of the social drinking that’s built into the eSapience tab.)
The website for the Barbon Institute has disappeared, but a related link reveals the subject matter of the custom-built platform for Greenberg: September 15, 2006, Barbon Institute, The Role of Insurance and Management of Risk in the 21st Century, New York, NY. That’s a bit global for the typical academic, but a softball down the middle for Greenberg.
Academic Integrity…For a Price
On its website, eSapience describes itself as not merely a public relations firm, but “a new media and research entity that shapes the debate on issues that intersect law, economics, and policy” through “a global network of academics and other public intellectuals.” In other words, their contribution to spin control is adding an academic veneer. They make you look good by packaging you and your issue in an academic robe. Yecch!
The lawsuit reveals some spicy details of their work with Greenberg. eSapience was trying to line up a New York Times journalist who might be inclined to write an article “sympathetically portraying ” Greenberg’s side of his legal battle with Spitzer. No such article was ever published – I guess Judith Miller was tied up with other issues. Nonetheless, it’s inspiring to know that the effort was made.
eSapience ran up bills approaching $1 million a month. The hefty charges “reflected the level of detail, sophistication, and status necessary to present Greenberg in the best light and to assure the presence and participation of key intellectual and public figures” at the events where he was invited. When you cut through the academic jargon, they’re basically saying that Greenberg had a rotten image, so they had to grease a lot of palms to make him look good. Nice job, fellas. Now all you have to do is figure out how to collect your fees.
So here we have the best minds in academia against the street smart, tough-as-nails Greenberg. Maybe they should bring in an arbitrator and find a quiet corner of the Greenberg Pavilion to work out their differences. No matter where they do the talking, and as much as I respect the brilliant professors, my money is on Greenberg.