The judge assigned to the civil fraud action against American International Group and its former chief executive, Maurice Greenberg, has declared that the “politics” of the high-profile case won’t sway his decisions.
Manhattan Supreme Court Justice Charles E. Ramos’ comments were recorded in the transcript of a Jan. 19 proceeding obtained by National Underwriter. At that hearing, he ruled Mr. Greenberg’s lawyers can obtain an AIG report concerning company accounting irregularities that was given to the New York Attorney General’s Office.
Before the judge agreed he could see the report, Mr. Greenberg’s attorney, Nicholas Gravante, charged that it had been written by AIG lawyers to cast all blame on Mr. Greenberg and his co-defendant–AIG’s former chief financial officer, Howard Smith. He added that the report served as a “blueprint” for the attorney general’s complaint against them.
Justice Ramos’ “politics” remark came when Assistant Attorney General Philip Moustakis began protesting that his office acted independently in bringing the case.
Cutting Mr. Moustakis short, Justice Ramos said: “We don’t have the press here. I know what is going on. I know there are a lot of name-calling and finger-pointing and even politics involved in this, believe it or not.”
He then declared: “I don’t care. I am here to adjudicate this case on the merits. I am sorry, folks–this is a level playing field, and that’s good news and bad news for everybody. I know exactly what is going on. We don’t have to belabor the record, particularly with the press not here…”
The judge–in ruling that AIG could not shield the report from view by claiming it was protected by attorney-client privilege–remarked that “the first page says it will be turned over to prosecutors or government investigators, [which] indicates to me there was no expectation of confidentiality at all.”
He said he found no exceptions to civil practice law and rules that would let the attorney general withhold it.
Roberta Kaplan, an attorney representing AIG, said the company might appeal the ruling.
At the hearing, the judge said Mr. Gravante’s charge that the AIG lawyers’ report was a blueprint for the attorney general’s complaint was “speculation” since he had not seen the report.
However, Mr. Gravante, in a statement to National Underwriter, said there were “many reasons to believe the attorney general colluded with AIG to concoct an investigation that would justify the forced retirement of Mr. Greenberg and baseless fraud accusations made by the AG on national TV. We intend to use every available legal option to force the AG to turn over all evidence to which Mr. Greenberg is entitled.”
The TV appearance he referred to was on April 10, 2005, on ABC’s “This Week with George Stephanopoulos.”
The judge did not elaborate on his remarks concerning “politics.”
However, Mr. Greenberg began implying politics were involved in 2004 even before New York Attorney General Eliot Spitzer revealed an investigation that leveled charges of commercial insurance bid-rigging and other improprieties involving AIG, other insurers and major brokers, along with later allegations that the carrier had improperly manipulated its balance sheet with finite reinsurance deals.
At that time, before Mr. Spitzer was announced as a Democratic primary candidate for governor, Mr. Greenberg told a broker meeting: “We need to continue operating in an environment of financial creativity or more and more businesses will go overseas. There is a clear need to differentiate between a parking violation and a murder charge. This is where our industry can enlighten political figures who seek to advance to higher offices.”
AIG is in talks with Mr. Spitzer’s office concerning a reported possible agreement to pay more $1 billion to settle fraud charges against the company. Ms. Kaplan said she expected to be out of the case next month.