Former A.I.G. CEO Hank Greenberg is attempting to kill a New York State securities law that led to him paying $9 million to settle a securities fraud investigation. And his former employee and political lackey Tom MacArthur is trying to help him.
The New York Times reported that MacArthur introduced federal legislation to gut the Martin Act, “a New York securities law that predates the creation of the federal Securities and Exchange Commission.” Destroying the Martin Act is a top priority of Greenberg and the U.S. Chamber of Commerce, who have launched a coordinated effort to stymie state securities laws. MacArthur has strong ties to Greenberg—he ran York Risk Services Group while it was owned by A.I.G. and received $20,000 from Greenberg’s current company, C.V. Starr.
It’s clear why Greenberg wants to gut the Martin Act. Former New York Attorney General Elliot Spitzer used the law to launch the securities fraud investigation against Greenberg. The investigation cited “two sets of transactions”—one inflated A.I.G.’s reserves, the other enabled A.I.G. to mask losses. The company ousted Greenberg in 2005 after the transactions came to light, and Greenberg admitted culpability and paid $9 million to settle last year.
Now MacArthur is trying to help Greenberg exact revenge, attempting to gut a law designed to protect families and everyday people from securities fraud and protect the economy from the kinds of risky behavior that helped cause the 2008 financial crisis.
“Representative MacArthur has unfailingly worked to pass laws that help rich donors and big corporations, and now he can add disgraced insurance executives to the list,” said DCCC Spokesman Evan Lukaske. “MacArthur wrote and introduced a bill designed for one purpose—to help his former boss, disgraced insurance executive Hank Greenberg, gut the law used to hold him accountable for securities fraud. Because of MacArthur, Garden State families are facing higher taxes and increased healthcare premiums, yet his focus in Washington is helping millionaires and Wall Street banks. MacArthur’s twisted priorities show why he needs to be replaced.”
Evan Lukaske, Democratic Congressional Campaign Committee
Photo: Tom MacArthur, US Congress.