Name Joseph Cassano | ||
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Similar People Martin J Sullivan, Angelo Mozilo, Kathleen Corbet, Richard S Fuld - Jr, Salvatore Cassano | ||
EXCLUSIVE: Disgraced Firefighter Joe Cassano suspended for allegedly 'defecating' on lawn furniture
Joseph J. "Joe" Cassano (born 12 March 1955) is an American insurance executive who was an officer at AIG Financial Products from the division's founding in 1987 until his resignation in February 2008. Cassano is considered a key figure in the Late-2000s financial crisis. Political writer Matt Taibbi nicknamed him "Patient Zero of the global economic meltdown."
Contents
- EXCLUSIVE Disgraced Firefighter Joe Cassano suspended for allegedly defecating on lawn furniture
- Work at AIG
- Subprime mortgage crisis
- Political contributions
- Early life
- References
Work at AIG
In 1987, AIG hired Cassano as one of the first ten people in the Financial Products unit, as Chief Financial Officer. In 1994, Thomas R. Savage appointed Cassano as head of the Transaction Development Group. Cassano accepted the 1998 proposal by J.P. Morgan to package credit default swaps on Broad Index Secured Trust Offering (nicknamed Bistros). Cassano considered these collateralized debt obligations a key event: "It was a watershed event in 1998 when J.P. Morgan came to us, who were somebody we worked with a great deal, and asked us to participate."
Subprime mortgage crisis
Cassano sold hundreds of billions of credit protection in the form of CDSs without having to put up any real money as collateral as this form of insurance had been deregulated with the Phil Gramm-sponsored Commodity Futures Modernization Act of 2000, signed by Bill Clinton. When, in the financial crisis of 2008, investment banks requested insurance money for their collapsing derivatives, AIG was unable to deliver and received a bail-out from the taxpayers. Just one year earlier while discussing the company's CDS portfolio with analysts, he said "It is hard for us, and without being flippant, to even see a scenario within any realm of reason that would see us losing $1 in any of those transactions."
During his career at AIGFP from 1987 until he was forced to retire in March 2008, Cassano received $315 million: $280 million in cash and an additional $34 million in bonuses. An initial $1 million-a-month consulting fee was later canceled. According to Matt Taibbi:
In fact, Cassano remained on the payroll and kept collecting his monthly million through the end of September 2008, even after taxpayers had been forced to hand AIG $85 billion to patch up his mistakes. When asked in October why the company still retained Cassano at his $1 million-a-month rate despite his role in the probable downfall of Western civilization, CEO Martin Sullivan told Congress with a straight face that AIG wanted to "retain the 20-year knowledge that Mr. Cassano had." (Cassano, who is apparently hiding out in his lavish town house near Harrods in London, could not be reached for comment.)
In the wake of the scandal, United States regulators and the United Kingdom Serious Fraud Office began investigating Cassano's dealings to determine whether they were just excessive and risky, or criminal.
Political contributions
Cassano was a political contributor to the campaigns of Democratic Senators Chris Dodd and Barack Obama and the Republican Representative Nancy L. Johnson.
In March 2009 Cassano was linked to e-mails he authored in 2006 which solicited contributions from AIG executives for Dodd's campaign due to Dodd's position as incoming chairman of the Senate Banking Committee.
Early life
Cassano grew up in Brooklyn, New York, where his father was a policeman. He earned a political science degree from Brooklyn College in 1977. He worked in the back office at investment bank Drexel Burnham Lambert during their junk bond phase.