Aon Deal Must Include An Apology, Spitzer Says
Marsh made one when it entered settlement, he notes
By Ameet Sachdev
Chicago Tribune Staff Reporter
Published February 24, 2005
New York Atty. Gen. Eliot Spitzer wants Aon Corp. to say "I'm sorry."
Spitzer said Wednesday he would expect a settlement with the Chicago-based insurance broker to include an apology similar to the one he got from Aon rival Marsh & McLennan Cos. when it agreed to pay $850 million to drop bid-rigging charges.
"I would be surprised if I were to enter any settlement with any company which was not willing to make some public acknowledgement of the wrongdoing," Spitzer told reporters following a speech at the Union League Club of Chicago.
Spitzer may be public enemy No. 1 for some, but that didn't stop Chicago's business elite from rubbing elbows with him. More than 400 people showed up to eat oven-roasted Atlantic salmon at the Union League Club's black walnut-paneled dining room.
"He's made such a splash in New York, it makes sense to hear what he has to say," said Scott Lewis, an attorney at Chicago law firm Sidley Austin Brown & Wood.
In his prepared remarks, Spitzer said he often gets asked who's the next target. He answered jokingly: "Well, who's left?"
He turned serious later when he said that the probes have taught him that "only government can enforce rules of integrity and transparency in the marketplace. ... Self-regulation has been an abject failure."
Wednesday's visit didn't appear to be about official business. He came to accept the Paul H. Douglas Ethics in Government Award from the University of Illinois. In the evening, he was scheduled to speak at an American Jewish Committee dinner at the Ritz-Carlton Hotel. In between, he said he had private meetings, some of which involved fundraising for his 2006 Democratic bid for governor of New York.
Spitzer declined to provide any more details of his negotiations with Aon, other than to say talks are "moving forward." The attorneys general in Illinois and Connecticut also are participating in the discussions in an effort to reach a joint settlement of investigations into Aon's business practices.
Aon has been under a cloud since Spitzer brought civil fraud charges against Marsh in October, accusing it of conspiring with insurers to rig bids and fix prices for insurance policies bought by businesses.
Spitzer said at the time that corruption was rife throughout the industry, and focused on contingent commissions that insurers paid to brokers based on the volume and profitability of the policies they wrote. He has said such incentive payments are improper and increased costs for insurance buyers.
On Jan. 31, New York-based Marsh settled with Spitzer for $850 million in an agreement that includes an apology to the firm's clients for the unlawful actions of "certain Marsh employees." At the same time, Marsh neither admitted nor denied wrongdoing, a common stance of companies involved in regulatory settlements because it helps protect them in private lawsuits.
Spitzer said Marsh's statement of contrition was critical to the settlement.
"I simply won't settle with folks who don't understand that what was done was wrong," he said. "If they don't internalize that notion and can't articulate it, then the value of the settlement is nil."
Leaders at Aon, the nation's second-biggest insurance broker, have said they found no evidence of bid-rigging in an internal investigation. Spitzer also is investigating whether Aon improperly steered business to insurers which reciprocated by letting the company arrange its reinsurance--which carriers buy to protect their own risks.
Spitzer hasn't formally accused Aon of any wrongdoing, yet the two sides have been engaged in talks about a potential settlement for several weeks. Earlier this month, Aon set aside $50 million toward potential settlements with New York and other states, but company officials acknowledged that their financial liability could be greater.
He added that Aon's previous statement that it had found "some" employees who had violated the company's code of conduct didn't qualify as an apology.