Thomas Russo of Patton Boggs, formerly the top in-house lawyer for Lehman Brothers, is the new general counsel for American International Group Inc. The company announced his appointment Tuesday, a day after The National Law Journal reported that Russo had accepted the job.
"It is a challenge," Russo said in an interview Tuesday about joining the company, which staved off disaster in the credit crisis with government aid. "I think it is a real opportunity to both pay the taxpayer for its support and to have a viable strong insurance company after that. And so the exciting part is to participate in making that happen. Now it's not a sure thing, nothing is a sure thing, but ... I'm excited about the process in trying to make that come about."
His title at AIG will be executive vice president, legal, compliance, regulatory affairs and government affairs and general counsel.
Russo, 66, was vice chairman of Lehman Brothers Inc. and the chief legal officer of Lehman Brothers Holdings. He was at the company for 15 years, until it went bankrupt in 2008. He joined Patton Boggs in 2009 as senior counsel in the New York office. Before joining Lehman Brothers in 1993, Russo was a partner and member of the management committee at Cadwalader, Wickersham & Taft.
AIG's former general counsel, Anastasia Kelly, resigned Dec. 30 over compensation issues. Russo said AIG's president and chief executive officer, Robert Benmosche, sent him an e-mail at the end of December, asking if he would be interested in the job. In the wake of the e-mail, Russo said, he began meeting with people at AIG. While considering the job -- a process interrupted by vacation and a hospital stay to treat diverticulitis, Russo said -- he "met with every member of the board, and I met with the senior leadership of the firm. I read most analysts' reports, spoke to some analysts, spoke to a lot of people outside the company who knew the company."
AIG has become a symbol of corporate excess during the financial crisis. Friends told him, he said, that he was crazy to consider the job in the wake of his experiences at Lehman. "There's no doubt the stress with the Lehman Brothers thing was absolutely enormous," he said. "Why would you go back into it?"
Russo said he sent one friend an e-mail Tuesday telling him he was taking the AIG job because of the challenge. "I said, if I didn't accept the job, I would always look back and wonder what it would have been like to participate in an important endeavor," he said. "It's an opportunity that sort of transcends who you are as an individual, and it's exciting to be back and doing something that's important."
Still, Russo said, half-joking, that as he watched famously unretired Minnesota Vikings quarterback Brett Favre getting hammered by the New Orleans Saints last month, he found himself "wondering if [Favre] was thinking, 'Gee, I should have retired.'" But, Russo added, "he decided to play the game at his age and all that goes with it, and the effect he had on Minnesota and on that team and a lot of sports fans was enormous. I think the excitement and the challenge is something that is very alluring, and if I can play a small part in paying the taxpayer back ... then I will look back at this time and say, for all the knockdowns that I will inevitably have, it would have been worth the experience and the knowledge that I was helpful. If that doesn't turn out, well, such is life."
As for his brief time at Patton Boggs, Russo said working on financial services regulatory issues at the firm "was nothing short of wonderful." He and Patton Boggs name partner Thomas Boggs have known each other for decades.
In a statement issued through firm spokeswoman Rebecca Carr, Boggs described Russo as "a one-in-a-million sort of person. He possesses a sharp and unparalleled understanding of how business, law and government intersect and he is also one of the nicest people you will ever meet."
Russo wouldn't say how much he will be paid at AIG, but said, "My compensation is, for the most part, in stock and ... that's the way it's supposed to be under the new regime."
He said his first task will be getting to know the people in AIG's legal and compliance department, and to understand the investments AIG is unwinding to pay back public investment in the company.
An adjunct professor at Columbia University Graduate School of Business, Russo said that, as part of a course on the credit crisis he taught over the summer, he assigned students different roles: reporters, the treasury secretary, the chief executive officer of a company receiving TARP funds, academics. Then, he rotated the roles, he said, so his students could understand the different perspectives involved.
"You have to put yourself in different people's seats," he said. "You can't just look at something in your own seat. One of the problems, when you're in a seat, you tend to look at it from the prejudices that that seat brings you. And I think, ultimately, that may be what you have to do, but it's dangerous to make a decision without data. It's dangerous to make a decision without understanding the different players involved."