Greenberg Fights New York AG to Keep Reinsurance Testimony Private

By | February 2, 2009

Maurice “Hank” Greenberg, former chief executive of American International Group Inc., has gone to court to prevent New York’s attorney general from releasing testimony Greenberg gave in a state lawsuit accusing him of fraud, according to court documents.

Greenberg’s efforts to keep the testimony confidential are his latest attempts to rehabilitate his name and reputation, even as the company he once ran struggles to survive after receiving a massive taxpayer bailout.

In 2005, then Attorney General Eliot Spitzer sued AIG, accusing the insurer and Greenberg, now 83, of manipulating financial results and engaging in fraud.

In a motion in Manhattan state court on Jan. 20 by his lawyers Boies, Schiller & Flexner LP, Greenberg said he wanted to keep the testimony, during which he invoked the Fifth Amendment to the U.S. Constitution not to incriminate himself, confidential because it touched on confidential corporate documents.

The motion, a copy of which was obtained by Reuters, seeks a protective order to stop New York’s current attorney general Andrew Cuomo from releasing details of the testimony.

“The NYAG, which has long attempted to convict Mr. Greenberg in the court of public opinion, should not be granted this extra-judicial advantage,” Greenberg’s lawyers wrote.

Greenberg, 83, testified last year in depositions taken by lawyers for the state, and Cuomo’s office signaled its intention to release it in a letter late last year.

AIG has received a $150 billion bailout from the federal government. Greenberg, an AIG shareholder, has been critical of the structure of that bailout and the company’s management.

TAKES THE FIFTH

The motion said Greenberg declined to answer questions about his role in a reinsurance transaction with Berkshire Hathaway’s General Re Corp. that artificially boosted AIG’s loss reserves by about $500 million in 2000 and 2001. He also declined to answer questions about this deal in early 2005.

A record of Greenberg’s testimony exists in transcript form and on videotape.

Four former General Re executives and a former AIG executive were convicted last year of conspiracy and fraud in a separate criminal case.

Greenberg faces three civil charges, including the General Re matter.

“The NYAG is clearly desperate to keep interest in this shrinking case alive,” said Nicholas Gravante, one of Greenberg’s lawyers.

A spokesman for Cuomo declined to comment.

Greenberg, who had been with AIG 38 years, quit in February 2005 after disagreeing with the board over legal and regulatory investigations, including Spitzer’s.

In 2006, AIG paid $1.6 billion to settle those same matters.

Judge Charles Ramos, overseeing New York’s case, has previously said he was frustrated with delays in moving to trial. He has asked that all depositions and document disclosures be made by April 30, and all witnesses be identified by May 29.

Greenberg’s lawyers say they are confident the case will never go to trial.

(Reporting by Lilla Zuill)

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