Former American International Group chairman and CEO Maurice“Hank” Greenberg called the intervention by the federal governmentin the company a “nationalization” in a Washington publicappearance on Thursday.

In a feisty, 90-minute monologue, Greenberg also said hewouldn't have allowed the notorious AIG Financial Products divisionto collateralize the purchase of almost $80 billion worth ofsecurities backed by mortgages of various quality through use ofits life company reserves.

In his remarks, the 87-years young Greenberg took on thecompany, Eliot Spitzer and the regulatory environment.

For one thing, noting that his successor, Martin Sullivan, wasfired over the telephone by then-Treasury Secretary Henry Paulsonin 2008, Greenberg said he declined to talk to Paulson when theysaw each other during a recent Washington event.

When approached by Paulson, he would only tell him, “Read mybook,” Greenberg said.

The occasion for Greenberg's appearance was to tout the two-partbook he has written about AIG, “The AIG Story.”

He currently is CEO of the company that was the predecessor ofAIG, C.V. Starr Co., founded in China in 1919. He took it backafter going to court with AIG.

He said Starr does business in a number of foreign countries,but doesn't currently write or broker life insurance products.

He declined to go into detail about the decision of AIG'scurrent management last month not to join in his lawsuit againstthe government.

He said the federal government could have helped AIG absent the“nationalization” that he said occurred, whereby the governmenttook a 79.9 percent stake in the company in September 2008 inexchange for $85 billion in cash.

But, he noted, after rejecting joining AIG in its suit seeking$25 billion against the government in the Federal Court of Claimsin Washington, AIG several weeks later did sue the New York FederalReserve Bank after the NYFed declined to support AIG in its effortsto recoup $14 billion lost on mortgage-backed securities (MBS)issued by Countrywide, later taken over by Bank of America. Thatsuit was filed in early February in New York state court.

Greenberg said that AIG had had assets seizedtwice, in Iran and Pakistan, but had won settlements in the WorldCourt that reimbursed the company.

“We were nationalized in the United States, and that's thereason we're suing, as a major shareholder, to get compensated,” hesaid.

In questioning later, Greenberg also said AIG did notparticipate in the derivatives business to anywhere near the extentit did after he left in 2005.

“We understood how to manage AIG Financial Products,” he said.AIG got into trouble after counterparties to the credit defaultswaps (CDS) sold by AIG Financial Products demanded collateral asthe value of the MBS declined, and it became difficult to raisecash. AIG Financial Products sold $2.77 trillion worth of CDS, andthe NYFed provide cash and the government's support as newmanagement wound down the huge speculation in MBS by AIG throughits London-based Financial Products unit.

“We had an enterprise risk management structure” before ERM wasconceived, he said. He also said that during his tenure, AIG knewevery day how much risk was outstanding.

“We wouldn't have been in that position had I been at thecompany,” he said. “That just never would have happened.”

Asked during the questioning period why he did not intervene asAIG's largest shareholder as the Treasury Department and theFederal Reserve Board and NYFed intervened in the management of AIGand a new board was constituted, Greenberg said, “They were at warwith me.”

He also acknowledged, “I was stupid. I thought no one could sinkthe company.”

He appeared bitter about his ouster, saying the majority of theAIG board abandoned him after New York State began investigatingAIG's activities in 2004, and forced him out in 2005.

He labeled the state attorney who launched the investigationthat resulted in his ouster as the “disgraced Eliot Spitzer.”

He quoted Spitzer as saying, “I am going to take Hank Greenbergdown,” and said the transactions Spitzer went after had beenapproved by AIG's outside auditor for five years.

He also railed against New York's Martin Act,the law Spitzer used to pressure Greenberg to leave and to impose ahuge fine against AIG in 2005. He said the law allowed New Yorkprosecutors to go after a company without proving criminalintent.

He also said he would not have used the reserves of AIG's lifebusinesses to collateralize purchases of MBS of various quality, asAIG did after he left.

The Fed later created a facility called Maiden Lane III to housethose securities in exchange for liquidity for AIG's lifebusinesses.

He noted that of that initial $85 billion in aid, $60 billionwas given to counterparties of CDS AIG Financial Products had soldas insurance against losses on MBS that were rated AAA, but turnedout to be “garbage.”

He noted that $14 billion of that was given to Goldman Sachs, asthe counterparty to MBS that GS had created.

He said AIG management made a mistake giving cash to CDScounterparties when AIG's credit rating was lowered, saying therewas no objective pricing on CDS.

He said that when approached with margin calls, if he would havebeen CEO, he would have told the counter-parties to sue.

He said the regulatory environment has changed considerablysince the Enron crisis of the early part of the decade, and heincluded insurance companies in discussing that issue.

He said it takes much longer to process insurance transactionsthan it used to because of the heightened regulatory environment,even though the industry is state-regulated. And, he said, thatdeals with international as well as domestic transactions.

“The regulatory environment is going to hold back growth,” hesaid.