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Ex-AIG chairman starts to tell his side of story at fraud trial
[MANHATTAN] Maurice "Hank" Greenberg told a judge that he was just too busy to commit fraud.
After 4 1/2 days of intense questioning by a government lawyer, Mr Greenberg finally got to elaborate on his defense to civil fraud allegations through friendly questioning by his own attorney, David Boies.
The former American International Group Inc chairman told a judge that he relied on underlings to handle the details of individual deals. He said he was busy elsewhere, visiting as many as 30 countries in a typical year and spending each day reviewing hundreds of pages of documents, participating in as many 70 telephone calls and attending numerous meetings.
"It was such a big company," Mr Greenberg said. "It was hard for me to cover all the bases.""Did you have confidence in the AIG people on whom you were relying on for the two transactions at issue?" Mr Boies asked. "Absolutely," Mr Greenberg replied.
The 91-year-old spent has spent much of his time on the witness stand in often-testy exchanges while defending his decision to enter into two transactions in 2000 that New York attorney general Eric Schneiderman alleges were orchestrated to hide AIG's true financial condition from shareholders.
Mr Greenberg has maintained that he was too busy as head of the company to tend to the details of individual deals. He said he trusted his underlings to structure the transactions and relied on the company's lawyers and accountants to make sure they conformed with regulations.
The lawsuit, originally filed by then-attorney general Eliot Spitzer in 2005, accuses Mr Greenberg and ex-AIG chief financial officer Howard Smith of arranging two transactions in 2000 to conceal the company's real fiscal health: a US$500 million deal with Berkshire Hathaway Inc's General Reinsurance Corp allegedly used to offset a decline in loss reserves, and an agreement with a Barbados-based reinsurer, Capco Reinsurance Co, allegedly used to offload underwriting losses from a failed auto-warranty program.
Mr Greenberg and Mr Smith had resigned earlier that year amid an accounting scandal, and New York-based AIG then restated its earnings, lowering them by US$3.4 billion and agreeing to pay US$1.64 billion to settle the claims without admitting or denying wrongdoing.
Mr Greenberg and Mr Smith have maintained that both transactions were properly accounted for and reported on financial statements.
The case is State of New York v Greenberg, 401720-2005, New York state Supreme Court (Manhattan).