Broad denies any responsibility

Nikki Blonsky (no relation) 

(Lack of) Accountability Dept.

I guess I touched a nerve yesterday, when I once again mentioned billionaire Eli Broad's connection with the AIG debacle. It only took a few hours before power-philanthropist Broad had his communications secretary Karen Denne write me a curt little note, correcting me for implying that Broad bore any responsibility in AIG's collapse.

Dear Mr. Blonsky (Damn! She couldn't even spell my name right)

I wanted to correct inaccurate information you have on your website. Mr. Broad’s only affiliation with AIG was when he sold his company SunAmerica to AIG in 1999. He remained as chairman of AIG Retirement Services until 2005. It is grossly inaccurate to say that he bears some responsibility for the company’s collapse. He was the founder of KB Home and has not had any affiliation with the homebuilding company since the early 1990s. He was CEO until 1989 and chairman until 1993.

So much for corporate responsibility

Here's Mr. Blonsky's (no relation to Nikki Blonsky, actress in Hairspray) response:

Dear Ms. Denne,

I don't blame your boss for trying to hide his connections to AIG. But his (your) deniability is not plausible. Regardless of when Mr. Broad cashed in on KB (B for Broad) Home, or when he sold SunAmerica to AIG at an inflated price, or when he officially left AIG-VALIC's board of directors, he cannot escape the fact that he helped shape the mega-company's current disastrous policies--and still does.

Take for example Mr. Broad's role in a Sept. 2008 meeting of AIG bigwig shareholdes like Shelby Davis of Davis Selected Advisers LP, and Bill Miller of Legg Mason Inc., as reported in Bloomberg, "to discuss alternatives to an $85 billion U.S. takeover that may dilute their stakes."

To pull this off strikes me as terrifically tricky,'' said James Cox, a professor at Duke University who specializes in securities law. ``A defensive takeover by investors of their own firm, on this scale, has never happened before.''

 Bloomberg went on to report that last May, Broad and other big shareholders expressed concerns when the stock began heading downward. Broad owned 27 million shares of AIG as of June 2008 - at the time worth $800 million. As of last fall, that stock was worth a mere $72 million.

Wait a minute. I'm not done. Check out the June 17, 2008 issue of Business Week, ("Greenberg, Broad on AIG's latest unheaval") which describes how "AIG Director Stephen Bollenbach, backed by billionaire investor Eli Broad, was named lead director." Broad says: "I have a lot of confidence in Steve Bollenbach, who's done great at everything he's ever done in life..." The article also contains an interview with former CEO Hank Greenberg and one of AIG's most powerful stockholders, Eli Broad.

There's more, much more, much, much more. But I'll get back to you on all that. I'm sure most of this will come out in the hearings, now that the corporate bonus cat has been let out of the bag. Anyway, Ms. Denne. If you can show me where I have mis-stated anything factual re: Mr. Broad's role, past or current, in AIG, I will certainly print a correction.

Signed,

M. Blonsky