October 29, 2004

Insurance broker Marsh & McLennan is at the center of the emerging commission and bid-rigging scandal, but it hasn't actually been convicted of anything yet, nor have its top execs. So eyebrows are being raised at New York Attorney General Spitzer's hardball (and successful) tactic of announcing that he wouldn't negotiate with the company unless it got itself a new CEO. Aren't private companies still supposed to be entitled to select their own leaders, at least until such point as said leaders are found guilty by due legal process of some misconduct? There's no denying that the tactic enjoyed immediate success: within days CEO Jeffrey Greenburg had announced his departure. Giving every appearance of running scared, the Marsh directors selected as his replacement former prosecutor Michael G. Cherkasky, a former head of the Kroll security and investigations consulting firm, who is said to be light on insurance experience but has a distinctive line on his curriculum vitae: he was once Eliot Spitzer's boss. The New York Times's coverage is here, here, here (Spitzer says he doesn't plan to indict Marsh, and hasn't to date brought charges against individual Marsh employees either) and here.