Too Big to Fail [85]
Like Dimon, Willumstad had been outmaneuvered by Weill and, after leaving Citi in July 2005, went on to start a private-equity fund, Brysam Global Partners, which made investments in consumer finance businesses in Latin America and Russia. His partner, Marge Magner, was another Citigroup exile. Under Dimon, JP Morgan had become the largest investor in Willumstad’s fund, whose offices were just across Park Avenue from JP Morgan’s own headquarters. While under his and Magner’s direction, Brysam had become a profitable firm. Willumstad held another, much more important position: He was the chairman of the board of American International Group, AIG, the giant insurer, which was the reason for his visit to Dimon this day.
“I’ve been thinking about something and could use your advice,” Willumstad, a soft-spoken man, said to Dimon after he had finally been ushered into his office. He revealed that the AIG board had just asked him if he’d be interested in becoming CEO; the current CEO, Martin Sullivan, would likely be fired within the week. As chairman, Willumstad himself would be responsible for paying a visit to AIG’s headquarters the following day to warn Sullivan that his job was in jeopardy.
“I like what I’m doing,” he said earnestly. “No one’s looking over my shoulder.”
“Except for me!” Dimon, one of his biggest financial backers, countered with a laugh.
Willumstad explained that he had been pondering accepting the top position over the past several months, ever since the credit crisis had engulfed AIG, and it had become increasingly clear that he might be given an opportunity to run the company. That prospect had left him painfully conflicted: While he had always wanted to be a CEO, he was sixty-two and now had the time to pursue outside interests, like auto racing.
A third-generation son of Norwegian immigrants, Willumstad came from a working-class background, growing up in Bay Ridge, Brooklyn, and then on Long Island. By the mid-1980s, he was rising through the executive ranks of Chemical Bank. As a favor to a former boss, Robert Lipp, he flew down to Baltimore to see what Weill and his right-hand man, Dimon, were up to at Commercial Credit, a subprime lender they were running. The drive and entrepreneurial energy of the Weill-Dimon team was strikingly different from the stuffy bureaucracy of Chemical and every other firm he’d seen in the New York banking industry.
The two offered Willumstad a job, which he accepted, though he couldn’t help but feel a bit of buyer’s remorse when, on his first day on the job, he met seventy-five Commercial Credit branch managers at a conference in Boca Raton and realized he had never seen so many middle-aged men in polyester leisure suits. Willumstad survived that shock—as well as the golf and the drinking—and eventually grew comfortable at the firm. In 1998 he helped lead a blitzkrieg of acquisitions that shocked the financial establishment: Primerica, Shearson, Travelers, and the biggest of all financial mergers, Citicorp. For a brief time the three of them had towered over a financial industry that had an abundance of towering figures; four years after Dimon departed Citi following a bitter falling-out with Weill, Willumstad assumed his old job of president, which proved to be as far as he would rise in the company.
For a good half hour, Willumstad and Dimon discussed the pros and cons of the AIG position. As chairman of the company, Willumstad knew better than most how deep the company’s problems ran; solving them would be an unimaginably huge challenge. Its parlous state kept bringing him back to the same decision: “I should take the job on an interim basis,” he said firmly.
Dimon shook his head. “Bullshit,” he said. “Either you want to do the job or you don’t.”
“I know,” Willumstad conceded. “I know.”
“You’re confusing the issues here,” Dimon insisted. “First of all, interim CEO is a very complex and difficult thing, and as an interim CEO, it will be exactly the same job as the permanent CEO. If I were the board, I wouldn’t allow