causes and for giving $36.5 million to the American Museum of Natural History shortlyafter museum President Ellen V. Futter joined AIG 's board.What pressure does Sullivan now face?Insiders say the new chief, who began his AIG career at the age of 16, is aggressivelyleading the charge for changes necessary to create a more transparent organization. Butthe longtime AIG manager -- formerly a vice-chairman and co-chief operating officer -- isalso under scrutiny by regulators. A close confidante of Greenberg, who essentially hand- picked Sullivan as his replacement, he also serves as a director in C.V. Starr and SICO.Sullivan has not been accused of any wrongdoing, but regulators are looking for signsthat he knew of or oversaw the dubious transactions. Any hint of that and he, too, could be forced out. An AIG spokesman says Sullivan has no comment on his future or thecompany's direction while AIG cooperates with investigators.Is Greenberg out of the picture?The 79-year-old insurance legend is due to appear before Spitzer for a deposition on Apr.12 and may face continued scrutiny for his actions, sources say. But Greenberg stillretains significant control of AIG through his 1.7% personal shareholding and stakes inthe private entities that together own another 15.7%. Although the full extent of hisinfluence is unknown, Greenberg controls 8.3% of SICO's voting stock, is president andCEO of C.V. Starr, where he owns 16.4% of the common stock, and is chairman of theStarr Foundation. The structure of SICO, in particular, has also given Greenbergenormous control because anyone who left the company -- or was fired -- prior toretirement often forfeited lucrative payments. "It was like joining some elite brotherhoodwhere, if you toed the line, you were set for life," says one insider. Investigators anddirectors may be hard-pressed to force Greenberg out of a private company, and he couldcontinue to exert influence from the background.Where was the board through this mess?For years, AIG had a board that was notoriously clubby and close to Greenberg. SaysPatrick McGurn of Institutional Shareholder Services: "Was there a reform Hank ever putin place that he liked?" But, thanks to shareholder pressure and new governanceregulations, the board has become more independent in recent years. More important, perhaps, the investigations have made directors nervous about their own liability -- anddetermined to take proactive action to distance themselves from any scandal, insiders say.They even demanded Greenberg's resignation -- an unthinkable act just months ago.How do regulators or other critics propose to fix these conflicts of interest?
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