WASHINGTON Oct 16 Federal Reserve Chairman Ben
Bernanke does not have to testify in the multibillion-dollar
lawsuit by the former chief of American International Group Inc
against the United States over the insurer's 2008
bailout, a federal appeals court said on Wednesday.
The ruling, from the U.S. Court of Appeals for the Federal
Circuit, overturned a lower court decision from July that said
Bernanke should submit to a deposition by lawyers for former
chief executive Maurice "Hank" Greenberg.
Deposing Bernanke while he is in office could disrupt
"significant" ongoing government activities, the panel said.
Greenberg's Starr International Co, once AIG's largest
shareholder with a 12 percent stake, also did not meet the legal
threshold to depose senior government officials and have access
to the Fed's deliberative process or Bernanke's mental
processes, the panel said.
"Starr's efforts to inquire into these issues have all the
appearance, and vices, of a fishing expedition rather than an
effort to establish legally material facts," it said.
Bernanke is due to step down from his role in January. The
panel said Starr could seek Bernanke's testimony after he left
that position, but would have to better make the case in order
to obtain that testimony.
A lawyer for Starr, David Boies, said they would seek to
depose Bernanke after he leaves office.
"We are confident that we can make the showing of the
importance of this testimony that the Court requires," he said
in a statement.
Once the world's largest insurer by market value, AIG was
bailed out on Sept. 16, 2008, as losses were sky-rocketing from
risky bets on mortgage debt through credit default swaps. The
government initially took a 79.9 percent stake in the New
Starr sued in 2011, and maintains that the bailout
short-changed shareholders out of tens of billions of dollars.
The company called the government's action an illegal taking
that violated the 5th Amendment of the U.S. Constitution.