As evidence of the alleged obsession, Mr. Murray referenced allegations in New York Attorney General Eliot Spitzer's lawsuit that Mr. Greenberg demanded that a trader buy shares to prop up the stock price. He also noted the deal with General Reinsurance allegedly designed to have the short-term accounting impact of boosting AIG's loss reserves.

As intriguing a figure as Mr. Greenberg is, I can't say that I've spent a lot of time wondering about his motives. On business ethics, I place way over on the highly principled end of the scale, but I can't swear that if I headed up a public company I wouldn't be tempted to sway to the short-term song of Wall Street.

Mr. Greenberg, in his response, said he has been known to question the overemphasis on short-term gains and whether “reporting quarterly earnings makes sense at all.” On that score, the alleged actions do seem out of character.

However, since reading Mr. Murray's column, I've spent more time worrying about the motivation of those–beyond Mr. Greenberg–who allegedly allowed and assisted in making false accounting reports a reality. Participants range from AIG employees to employees of Gen Re, and extend to auditors who supported inaccurate financials through inaction.

On a personal level, I can understand the unspoken pressure that might motivate an AIG employee to assist in developing unusual accounting schemes, and I have written previously from a personal perspective about the pressures that auditors face.

But in all the reports that have surrounded this latest blemish on the industry's history, the most troubling actions to me are the ones for which the motivations are less clear.

“If we spend a lot of time trying to figure out how to transfer [$500 million] of risk, we won't get this deal done in the time they [AIG executives] want,” one Gen Re executive is reported to have said. Other key statements included: “They'll find ways to cook the books, won't they?” and, “We won't help them do that too much. We'll do nothing illegal.”

Why did these folks get so wrapped in acting so quickly–and outside their usual capacity–to bow to the pressure of a company proposing to sell Gen Re reinsurance for the understood purpose of fooling analysts who used faulty short-term metrics? Taken together, the quotes suggest that members of this industry believe it is okay to help someone else do something wrong, as long as their own activities are “technically” within the law.

This thought process isn't unique to a single reinsurer–and it's not limited to rationalizing finite reinsurance transactions.

How many times have you faced similar situations involving longstanding major customers? How valid are these types of justifications?

Susanne Sclafane

Managing Editor

“The quotes suggest that members of this industry believe it is okay to help someone else do something wrong, as long as their own activities are 'technically' within the law.”