(Reuters) – The Federal Reserve chairman should not testify in the lawsuit by American International Group Inc’s former chief Maurice “Hank” Greenberg against the United States over the insurer’s 2008 bailout, the U.S. Department of Justice said.
In a Monday filing with the U.S. Court of Federal Claims, the government said Greenberg’s Starr International Co failed to show the “extraordinary circumstances” needed to justify a deposition of Fed Chairman Ben Bernanke in the multibillion-dollar lawsuit.
The government said information about Bernanke’s role in the bailout of AIG can be obtained elsewhere, such as minutes of the Federal Reserve’s Board of Governors or interviews of other officials.
It said this obviated any need for a deposition that Starr wants to hold on August 16, and added that high-ranking government officials like Bernanke in general cannot be deposed over the reasons that they took official actions.
David Boies, a partner at Boies, Schiller & Flexner representing Starr, said in an email: “We believe Mr. Bernanke has important testimony to give in this case.”
Last month, Court of Claims Judge Thomas Wheeler said Starr may pursue claims over the government’s taking of a 79.9 per cent stake in AIG in September 2008 and a separate 1-for-20 reverse stock split in June 2009.
A trial could begin late next year. AIG’s board decided in January not to join Starr’s lawsuit after a public backlash, including from Congress.
Starr once held a 12 per cent stake in AIG, which had been the world’s largest insurer by market value prior to the financial crisis and a $182.3 billion federal bailout.
Greenberg, 88, led AIG for nearly four decades before his 2005 ouster. Starr is appealing another judge’s dismissal of a related lawsuit against the Federal Reserve Bank of New York.
The case is Starr International Co. v. U.S., U.S. Court of Federal Claims, No. 11-00779.
(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)
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