* Bernanke played central role in AIG bailout -Starr
* Starr, run by Greenberg, was top AIG shareholder
By Jonathan Stempel
July 16 Federal Reserve Chairman Ben Bernanke
was the final authority on the "punitive" 2008 bailout of
American International Group Inc and should testify
about how and why it happened, a company run by the insurer's
former chief executive said.
In a Tuesday filing with the U.S. Court of Federal Claims,
Maurice "Hank" Greenberg's Starr International Co said Bernanke
made clear in testimony to Congress and the Financial Crisis
Inquiry Commission that it was his decision making that led to
an AIG bailout that ultimately grew to $182.3 billion.
Starr once held a 12 percent AIG stake. It believes
shareholders were shortchanged out of tens of billions of
dollars when the government took a 79.9 percent stake in the big
insurer at the height of the financial crisis.
Having spoken and written often about AIG in less
adversarial forums than a lawsuit deposition, including when he
told Congress in 2009 that "AIG's demise would be a catastrophe,
and therefore I did whatever I could to prevent that," Bernanke
does not deserve a shield from questioning now, Starr said.
"Starr has every right to probe the basis for Mr. Bernanke's
decision to impose punitive measures upon AIG - distinguishing
it from every other firm that received a loan" from the Fed,
Starr said. "No other witness can serve as a substitute."
The U.S. Department of Justice, which is defending against
Starr's lawsuit, declined to comment.
It has said that Starr has failed to show the "extraordinary
circumstances" justifying a deposition.
The government has also said Starr can obtain the
information it wants from documents and other witnesses, and
that high-ranking U.S. officials in general cannot be deposed
over official actions.
Last month, Court of Claims Judge Thomas Wheeler said Starr
may pursue claims over the taking of the 79.9 percent stake in
September 2008, and a 1-for-20 reverse stock split in June 2009.
A trial could begin late next year. Greenberg, 88, led AIG
for nearly four decades before his 2005 ouster.
The government has 10 days to respond to Starr's filing,
court records show.
The case is Starr International Co. v. U.S., U.S. Court of
Federal Claims, No. 11-00779.