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Former CEO AIG Greenberg to Testify in Gen Re Deal

Posted on 09 Mar 2010

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American International Group Inc.'s ex-chief executive officer, Maurice "Hank" Greenberg, will be testifying about transactions involving AIG and General Re Corp., the reinsurer owned by Warren Buffett's Berkshire Hathaway Inc.

Greenberg attorney Robert Morvillo advised Justice Charles Ramos in Manhattan on Monday that Morvillo's office and lawyers for New York Attorney General Andrew Cuomo reached an agreement for Greenberg to be questioned under oath. Ramos granted Greenberg's request to re-open his testimony.

Greenberg, 84, invoked his Fifth Amendment right against self-incrimination when he was questioned in 2008 about sham Gen Re transactions that led to the criminal convictions of seven people, his lawyers said in court papers. Last week, Greenberg's lawyers said in court papers that he no longer faces possible criminal prosecution.

“We have a partial consent,” Morvillo told Ramos today. “They agree they want to take his deposition, but the dispute is when,” Morvillo said.

Ramos said today Greenberg will testify March 10 about a lawsuit brought by then New York State Attorney General Eliot Spitzer in 2005 against Greenberg that claims AIG used sham transactions to hide losses and inflate reserves.

Morvillo told Ramos today that Greenberg was slated to leave for a trip to China and suggested that he testify upon his return to the U.S. on March 29. Ramos disagreed and suggested it happen as soon as possible.

“Why don’t we have it on Wednesday?” Ramos replied, “Bada bing, bada boom, he’s done.”

Morvillo said Greenberg’s lawyers needed to prepare for questioning on the Gen Re transaction, Judge Ramos interrupted him, saying, “After five years of litigation you need to be prepared? Deposition Wednesday, thank you very much.”

Assistant Attorney General David Ellenhorn told Ramos today that Greenberg’s lawyers, including David Boies, have repeatedly said Greenberg wanted to testify about the transaction. He said Greenberg’s lawyers have sought to get more time and gain a tactical advantage in the case.

“Five years ago David Boies wrote a letter and said ‘Mr. Greenberg is willing to testify about the Gen Re transaction’ and then three years ago, Nicholas Gravante, Mr. Boies partner, said ‘Greenberg is not taking the Fifth,’ ” Ellenhorn said. “He snookered us and he snookered the court.”

Reopen Testimony

Ellenhorn said that the state agreed to allow Greenberg to reopen his testimony in order to dispel any appeals issues Greenberg may argue later.

“I really feel used,” Ramos told Greenberg’s lawyers. “For years your side has come into this case and stated over and over again you wanted the documents and that you weren’t going to take the Fifth, and then you did.”

Greenberg, who wasn’t in court, said in court papers filed last week that the statute of limitations expired on Feb. 21. U.S. prosecutors secured five convictions of executives at trial and two guilty pleas. At the trial, prosecutors said Greenberg was an unindicted co-conspirator.

Because of the threat of prosecution, Greenberg in 2008 asserted his constitutional right against self-incrimination in pretrial testimony in the state fraud suit, he said in the March 2 court filing.

“I am prepared to testify regarding the Gen Re transaction,” Greenberg said in the filing.

Morvillo declined to comment after today’s hearing. Ellenhorn declined comment after court.


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