The federal government doesn't want Federal Reserve BoardChairman Ben Bernanke to submit to questioning concerning a lawsuitfiled in the aftermath of the 2008 federal rescue of AmericanInternational Group.

The $25 billion dollar lawsuit deals was filed against the U.S.by former AIG CEO Maurice "Hank" Greenberg through StarrInternational, a company he now controls and that formerly ownedmore than 13 percent of AIG stock. Greenberg alleges the U.S.violated AIG shareholders' constitutional rights by the way ithandled the bailout of AIG.

Judge Thomas Wheeler in late June cleared the case for trial,and then approved a motion by Greenberg lawyer David Boies atBoies, Schiller & Flexner, to depose Bernanke on Aug. 16 butthe Department of Justice has stepped in with a filing in the U.S.Court of Appeals for the Federal Circuit to stop thedeposition.

"Starr claims that the rescue terms offered by the FederalReserve Bank of New York—and voluntarily accepted by AIG'sboard—did not reflect AIG's true worth and effected a takingwithout just compensation under the Fifth Amendment or an illegalexaction," says the DOJ in its filing, adding, "It is axiomaticthat high-ranking federal officials—such as the chairman of theBoard of Governors, a Cabinet-level officer of the UnitedStates—should not be compelled to provide testimony at the behestof civil litigants absent extraordinary circumstances."

According to the DOJ it is just as obvious that "litigants arenot entitled to probe the mental processes of agencydecision-makers."

The motion to the Appeals Court adds, "The trial court—whicherroneously believed that it is a 'routine practice' in the Courtof Federal Claims to compel the testimony of sitting high-levelofficials—likewise failed to articulate any theory under whichpersonal testimony from Chairman Bernanke would be necessary orappropriate in this litigation."

The AIG board in January decided not to join the lawsuit, anddid so in such a way that even in the event Starr-Greenberg won thelawsuit, AIG would not benefit. The company was dismissed as aderivative plaintiff.

But the way the AIG board's decision came about bothered JudgeWheeler, as he acknowledged in his June decision to allow the caseto proceed, and later ruled to allow Greenberg's lawyers to deposeBernanke.

In his June decision, Wheeler acknowledged his pique that alawyer for AIG had dared predict how he would ultimately rule as acontributing factor in the decision to clear the lawsuit fortrial.

Wheeler also acknowledged in his decision that anothercontributing factor in his decision was an allegation that aTreasury official "made threatening statements to AIG's boardmembers when the board was fulfilling its legal obligation toconsider entry into this lawsuit."

He said media reports "contain inflammatory quotations from anumber of public figures and elected officials who apparentlylacked any understanding that AIG was required to consider entryinto the lawsuit under the demand process of Delaware law.

"It is unfortunate that AIG's board members had to deal withthis misplaced pressure and public outcry," Wheeler said.

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