From Member of the Bar to Piano Bar: AIG’s Russo Weighs Next Gigby
Russo says he’s thinking of Hotel Europe-style venture
As insurer’s top lawyer retires, he also considers writing
Tom Russo, who helped American International Group Inc. negotiate the end of its U.S. bailout, is retiring from his post as general counsel and considering opening a piano bar, among other endeavors.
Russo, 72, will stay with the insurer until a replacement is found, Chief Executive Officer Peter Hancock said Tuesday in a message to employees. The general counsel has been with the New York-based insurer since 2010, saying at the time that he joined “for the challenge.”
Russo and a group of friends are prepared to spend about $1 million each to start the venture in midtown Manhattan, he said Tuesday in a phone interview. The piano bar would be modeled after Hotel Europe in Switzerland, where executives gathered during the World Economic Forum, according to Russo. He said he’d spoken years ago to pianist Barry Colson about performing. Colson is a Canadian musician who has played in Davos, with a penchant for Billy Joel songs, according to the website vocativ.
“I may not be the world’s greatest singer but I certainly enjoy singing, and I enjoy that kind of fun,” Russo said Tuesday by phone. “So that’s been something on my mind that I think would be a good thing for New York and I just personally think I’d have a lot of laughs.”
Russo was the former top attorney at Lehman Brothers Holdings Inc. until the securities firm’s bankruptcy in 2008. He led negotiations with the Treasury Department and Federal Reserve Bank of New York to help then-AIG CEO Robert Benmosche repay the $182.3 billion rescue. The lawyer also worked on asset sales and helped the insurer navigate legal clashes with shareholders, Wall Street counterparties, regulators and ex-employees.
“Although I am pleased that he is ready to write a new chapter in his exciting professional life, on a personal level I will miss my friend and adviser,” Hancock said in the memo.
Russo said he may write a book of his experiences, and is involved in developing a movie script about the New York Yankees baseball team. He said he’s also the CEO of a private trust company with responsibility for the estate of Dr. Henry Jarecki, who would also invest in the piano bar.
Under Russo, AIG negotiated a billion-dollar deal with investors who accused the insurer of misleading them about risks related to subprime mortgages. He won a settlement with Bank of America Corp. that helped reimburse AIG more than $600 million for losses on home loans. And AIG resolved government probes into mortgage-insurance abuses, claims-paying lapses and ties to Cuba, a nation sanctioned by the U.S.
AIG also resolved a case filed by Duke University over claims tied to the school’s dispute with lacrosse team members falsely accused of sexually assaulting a stripper. The insurer had sold coverage to Duke.
One notable decision in his era was to avoid the courts: In 2013, Benmosche opted against joining ex-CEO Maurice “Hank” Greenberg in a lawsuit against the U.S. government regarding the bailout terms.
The general counsel started at AIG the same week as Hancock, an ex-J.P. Morgan & Co. executive who was hired to help manage risk. Hancock became CEO in 2014 and has reshaped management, naming a new chief financial officer, investing head and leader for commercial insurance.
Russo replaced Anastasia Kelly, who left AIG after a dispute about government-imposed limits on her own pay, people familiar with the matter said at the time. Between Lehman and AIG, he worked at law firm Patton Boggs LLP. He previously was at Cadwalader, Wickersham & Taft LLP and was an attorney at the U.S. Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission.
The most important part of the job moving forward is “the chemistry with Peter’s direct reports,” Russo said. “It’s not going to be the legal skills that will come to the fore, I think its going to be the psychological, sociological components to the job and the strategic nature of being part of a relatively small leadership team and having a very strong business acumen is essential.”