Buffett Talks, Greenberg Mum as Investigators Continue Probe of AIG

April 12, 2005

On the day when billionaire investor Warren Buffett was interviewed by investigators and said he told them everything he knew, Maurice Greenberg, former chairman of American International Group, revealed that he would not be able to answer questions when he is called before authorities today.

Speaking through his attorney, David Boies, Greenberg said he needs more time to prepare to testify given the volume of documents under review and thus will invoke his Fifth Amendment right not to speak.

“I am willing to accept responsibility and to account for the performance of my duties, but I believe that good order and fairness require that I have an adequate opportunity to be advised of the issues to be investigated and to my alleged involvement therein,” said Greenberg in his statement.

Buffett appeared before investigators from the Securities and Exchange Commission and the office of New York Attorney General Eliot Spitzer to answer questions about a 2000 transaction involving his General Reinsurance Co. and Greenberg’s AIG.

After his session, Buffett informed reporters that he told investigators everything he knew.

Spitzer, the New York State Insurance Department and the SEC have been investigating AIG’s accounting practices primarily related to a reinsurance transaction with General Reinsurance and dealings with other offshore reinsurance companies. AIG’s relationship with Starr International Co. is also under scrutiny.

AIG has acknowledged that the accounting of a 2000 General Re reinsurance purchase was improper and that it and other reinsurance deals may have misrepresented AIG’s net worth by as much as $1.7 billion over 14 years.

The New York Times reported on April 8 that attorneys at Buffett’s Berkshire Hathaway discovered that some documents regarding the 2000 General Re-AIG transaction had been altered.

Spitzer has indicated the Buffett is merely a witness and not a subject of the ongoing probes.

Greenberg, on the other hand, is a central figure. While he has indicated that a civil resolution is possible with AIG, the corporation, Spitzer has left open the possibility of criminal charges being brought against Greenberg.

Greenberg thought the General Re transaction was legal and proper, according to his attorney.

“It’s not something that goes to the integrity either of the company or the man,” Boies has maintained. “It’s not fraud.”

Spitzer has a different view.

“The evidence is overwhelming that these were transactions created for the purpose of deceiving the market. We call that fraud. It is deceptive. It is wrong. It is illegal,” Spitzer said Sunday on ABC-TV.

Spitzer said his evidence is strong. “We have powerful evidence. We will proceed with it. It could be civil. It could be criminal,” he told ABC.

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