ALBANY, N.Y. – Former American International Group executives are pursuing an ethics complaint against the New York prosecutors still bringing the charges that cost them their jobs at the insurance giant in 2005.
The complaint at the Joint Commission on Public Ethics by Maurice “Hank” Greenberg and Howard I. Smith alleges Assistant Attorney General David Ellenhorn lied in court stating the 88-year-old Greenberg intends to take public the private Starr Companies, where he’s now CEO.
“Mr. Ellenhorn has plainly misrepresented facts for the purpose of keeping his case against complainants alive, thereby discrediting NYAG and betraying the public trust placed in prosecutors,” the complaint said.
The state attorney general’s office declined to answer specific questions about the complaint, said Greenberg is still trying to evade responsibility for fraud at AIG by blaming prosecutors and that they “won’t be deterred from seeking justice in this matter.”
One remaining issue in the civil case is Greenberg’s potential lifetime ban from the securities industry or heading a public company. New York’s Court of Appeals ruled in June that the case can continue against former AIG CEO Greenberg and Smith, its former chief financial officer and now a Starr executive. The ethics complaint includes an affidavit by Greenberg saying he doesn’t intend to take public the Starr Companies, another large insurance and financial services entity.
The executives allege the state prosecutors want to continue the headline-making civil case for their own interests, that there’s no public benefit since monetary damages are already settled, and also suggesting other unethical behaviour by authorities. Those allegations include Ellenhorn accepting a 2009 private plane ride back from a Nebraska deposition offered by Greenberg attorney David Boies and that another of Attorney General Eric Schneiderman’s top staff recently asked Boies to tell the press that Ellenhorn did nothing wrong there.
“I declined to use the phraseology proposed by the representative of the New York Attorney General’s office for a number of reasons, including that it was my statement, that I did not know whether Mr. Ellenhorn had done something wrong in failing to disclose the plane ride or in failing to make reimbursement,” Boies said.
A spokesman for the Joint Commission on Public Ethics declined to comment.
Schneiderman’s office declined to comment on the accuracy of Ellenhorn’s court statements, whether he accepted a plane ride without paying reimbursement or whether one of his supervisors contacted Boies asking he make certain comments to reporters.
“No one is above the law, no matter how rich or powerful, and that is why three consecutive attorneys general have sought for nearly a decade to hold Hank Greenberg responsible for his role in a massive fraud,” Matt Mittenhall, spokesman for Schneiderman, said Thursday. “For just as long, he has tried to evade responsibility through delay and by attacking his prosecutors.”
The civil lawsuit claims Greenberg and Smith participated in a “sham transaction” between AIG and General Reinsurance Corp. meant to bolster AIG’s financial statements and stock performance by showing increased insurance reserves.
Greenberg, who over a 35-year career built AIG from a small company into the world’s largest insurer, lost his job in 2005 amid the allegations by then state Attorney General Eliot Spitzer. He and Smith settled related federal Securities and Exchange Commission complaints without admitting wrongdoing in 2009. He declined to comment on the current ethics complaint and the commission’s review of it.
“Mr. Greenberg has instructed his staff and his counsel to co-operate fully with the state’s investigation,” said Arthur Schwartz, a senior adviser.