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Faithful to the adage that the pen is mightier than the sword, a company run by Maurice “Hank” Greenberg planned to enlist academics, biographers and journalists to rebuild his reputation after the legal troubles that followed his forced retirement from American International Group, according to documents filed in a lawsuit.
ESapience, a media consultancy, is suing CV Starr, the speciality insurance firm of which Mr Greenberg is chairman and chief executive, for breach of contract, alleging that it is owed more than $2m in unpaid bills for a campaign designed to “present Greenberg in the best light”.
CV Starr confirmed it hired eSapience, which is chaired by David Evans, a visiting professor at University College London, in the spring of 2006 but added that the relationship ended after a few months. It said “there was now a billing dispute” and declined to comment further. Although the use of lobbyists is commonplace in America, the civil lawsuit – filed last week in Massachusetts and seen by the Financial Times – offers a rare glimpse into the strategies used by companies and their leaders to influence public opinion.
ESapience’s proposed plan “to change the public conversation about Maurice Greenberg” allegedly involved both hiring a ghost writer for his biography and seeking a New York Times journalist willing to pen a sympathetic article on his legal tussle with Eliot Spitzer, then New York’s attorney general.
The positive coverage in the newspaper, in which Mr Greenberg bought a small stake last year, never materialised. People close to CV Starr said the alleged plan of bypassing the New York Times reporter who usually covered Mr Greenberg and getting another journalist to write on the issue was rejected.
But between May and September 2006, eSapience claims it founded two bodies – the eSapience Center for Law and Business and The Barbon Institute – chaired by the prominent academics Richard Epstein of the University of Chicago and Richard Schmalensee of the Massachusetts Institute of Technology, respectively.
The Boston-based firm hires academics for between $400 and $1,000 an hour, court documents say.
The two institutes were to organise events “for Starr’s, and in particular, Greenberg’s benefit”, according to the pleadings.
The Barbon Institute hosted an event on September 15 in New York’s St Regis hotel with Mr Greenberg as the main speaker.
ESapience did not return calls seeking comment. Calls to the Barbon Institute were routed to eSapience’s lawyer, who declined to comment. Mr Epstein declined to comment, while Messrs Schmalensee and Evans were unavailable for comment.
Mr Greenberg still faces civil charges from the office of New York’s attorney general, now run by Andrew Cuomo. Mr Greenberg denies wrongdoing.
The period of May to September 2006 coincided with the part of the New York governor’s race when Mr Spitzer faced what initially appeared to be serious opposition in the Democratic primary. Mr Spitzer ended up winning. Lawyers for Mr Greenberg were also negotiating with AIG to settle a series of disputes over AIG’s claims on the assets held by Mr Greenberg’s new company CV Starr.
Companies run by Mr Greenberg are no stranger to efforts to influence the media. A controversy erupted in 2004 when a Washington-based speakers’ bureau, Leading Authorities, sent e-mails to financial industry specialists saying AIG would pay upwards of $25,000 for speeches and opinion pieces attacking Mr Spitzer and defending the insurance industry. At the time, Mr Spitzer was investigating bid-rigging at AIG and two insurance industry companies run by Mr Greenberg’s sons.
AIG disavowed the e-mails and said it was unaware that its public relations firm at the time, Qorvis, had reached out to Leading Authorities.