Bernanke Order for AIG Bailout Testimony Appealed by U.S.Andrew Zajac
The U.S. appealed a court order that Federal Reserve Chairman Ben Bernanke should be required to testify in Maurice “Hank” Greenberg’s lawsuit over the American International Group Inc. bailout.
The trial judge in the Court of Federal Claims lawsuit, in which Greenberg’s closely held Starr International Co. seeks $25 billion from the U.S. for allegedly violating AIG shareholders constitutional rights, erred by citing the stakes in the case and Bernanke’s role as an “extraordinary circumstance” warranting his testimony, the Justice Department said.
“Under the trial court’s reasoning, any person with a grievance related to any decision in which the Federal Reserve chairman has personally participated, might equally be entitled to take his deposition,” the department argued in its filing in the U.S. Court of Appeals for the Federal Circuit in Washington.
Greenberg claims the assumption of 80 percent of the AIG’s stock by the Federal Reserve Bank of New York in September 2008 was a taking of property that violated shareholders’ rights to due process and equal protection of the law.
Judge Thomas Wheeler of the U.S. Court of Federal Claims ruled on July 29 that Bernanke would have to testify in the case -- something Starr has contended is necessary because of his role in the transaction.
Wheeler, who said he will attend the deposition to provide judicial oversight, said obtaining testimony from high-level U.S. officials has been a “relatively routine practice” in claims court when the individual has personal knowledge of relevant information.
In a related filing, the U.S. asked Wheeler to allow an appeal to the Federal Circuit of his ruling that the suit can proceed.
The case is Starr International Co. v. U.S., 11-cv-00779, U.S. Court of Federal Claims (Washington).