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Greenberg takes Fifth in Spitzer probe

Posted On: Apr. 17, 2005 12:00 AM CST

NEW YORK-Former American International Group Inc. Chairman Maurice R. Greenberg refused to answer dozens of questions posed by investigators last week as New York Attorney General Eliot Spitzer promised that more civil and criminal charges will be filed in his insurance industry probe.

As expected, Mr. Greenberg exercised his Fifth Amendment right against potential self-incrimination and declined to answer questions under oath in an interview last Tuesday with investigators from Mr. Spitzer's office and the U.S. Securities and Exchange Commission.

"I am willing to accept responsibility and to account for the performance of my duties, but I believe that good order and fairness require that I have an adequate opportunity to be advised of tche issues to be investigated and to my alleged involvement therein," Mr. Greenberg said in a statement issued before his interview.

Mr. Greenberg's lawyers had sought to postpone the interview, arguing that he had not had an opportunity to review "thousands of documents" related to transactions under investigation, many of which "took place from five to 20 years ago," the statement notes.

The interview came a day after Mr. Spitzer and SEC officials questioned Warren E. Buffett, chairman of Berkshire Hathaway Inc., about a 2000 deal in which a unit of Berkshire's General Re Corp. ceded $500 million in a loss portfolio transaction with a unit of AIG. AIG has conceded that it accounted improperly for the transaction as insurance.

Mr. Spitzer, meanwhile, promised more civil and criminal charges are coming in his wide-ranging industry probe. He offered no further details during remarks last week at a conference hosted by the Investorside Research Assn. in New York.

He had earlier suggested that he would not bring criminal charges against AIG itself and said at last week's conference that he considered indictments of corporations a "nuclear option" that he would avoid wherever possible.

In other related developments:

c An AIG SEC filing last week disclosed that Mr. Greenberg gave his wife, Corinne P. Greenberg, 41.4 million shares of AIG three days before he resigned as CEO last month. The stock closed down 1.5% Friday to $51.11, making the gift worth around $2.12 billion. Mr. Greenberg continues to hold 1.9 million AIG shares after the transaction, according to the SEC filing.

c AXA Re, a unit of Paris-based AXA S.A., reported that Mr. Spitzer and the SEC have requested information about transactions with Armonk, N.Y.-based bond insurer MBIA Inc. The transactions relate to the 1998 bankruptcy of Allegheny Health, Education and Research Foundation of Pittsburgh, Pa., as well as to nontraditional reinsurance products, AXA said.