Free Hank! Former AIG Boss Greenberg Wants Spitzer's Charges Dropped

Last Updated Sep 24, 2009 11:32 AM EDT

Let's set the record straight. Former American International Group CEO Hank Greenberg isn't languishing behind bars, living on bread and water and rooming with Bernie Madoff. Rather, he's surrounded by expensive Chinese art work in his plush New York City office at Starr International, a company he controls.

Nevertheless, our sympathies go out to him in his time of need. Greenberg still faces charges, lodged against him by former New York Attorney General Eliot Spitzer, that he "cooked the books" at AIG to make earnings look better than they really were. The complicated deal involved a reinsurance pact with a unit of Berkshire Hathaway, and will now send five people, including a former AIG top executive, to jail.

But not Hank. Greenberg has been on a roll lately. A billionaire lawyer himself, he's performed legal jujitsu on the court system, winning case after case. He fought once mighty AIG to a draw when his company began competing with AIG. Then he beat them again in a court fight over whether Starr owned a huge amount of AIG stock.

Now he wants the Spitzer shackles struck. In a hearing yesterday, he asked New York State Supreme Court Judge Charles Ramos to drop all the charges that Spitzer filed against him in 2005 when Greenberg still headed up AIG.

Greenberg pulled out every stop in his appeal. He claimed Spitzer, who became governor on the strength of his Wall Street prosecutions, had gone after him for the purpose of "enhancing his reputation as he pursued higher office." Spitzer, of course, resigned after a fling with a prostitute.

Greenberg has also said that New York Attorney General and gubernatorial hopeful Andrew Cuomo was part of an "oral agreement" to drop the Spitzer-era charges.

Judge Ramos hasn't ruled on the case yet. But before he does he should take a look at the $15 million fine Greenberg paid the Securities and Exchange Commission. The SEC said Greenberg and an associate had committed "numerous improper accounting transactions that inflated AIG's reported financial results between 2000 and 2005" and were "liable for AIG's violations of the antifraud and other provisions of the securities laws."

He might also want to ask Cuomo if he really agreed to let Hank off the hook. As a governor-wannabe who came down hard on AIG's bonus program earlier this year, the New York AG might not want to be seen as going easy on billionaires who profited at the public's expense.

  • Ed Leefeldt

    Ed Leefeldt is an award-winning investigative and business journalist who has worked for Reuters, Bloomberg and Dow Jones, and contributed to the Wall Street Journal and the New York Times. He is also the author of The Woman Who Rode the Wind, a novel about early flight.