Fannie Mae-No Politics (FNMA)

[TheMotivatedTrader]

WSJ: Close Greenberg Colleague Testifies Today in AIG Bailout Trial

http://blogs.wsj.com/moneybeat/2014/11/18/close-greenberg-colleague-testifies-today-in-aig-bailout-trial/

Hank Greenberg isn’t going to take the stand in the AIG bailout trial, but one of his closest allies will.

Howard Smith, a long-time close colleague of former American International Group Inc.AIG -0.15% Chief Executive Maurice “Hank” Greenberg, is scheduled to testify Tuesday morning.

Mr. Smith was one of the chief financial officers at AIG when Mr. Greenberg ran the company. He’s now vice chairman of finance at Starr Cos., an insurance and investment conglomerate Greenberg has been building since he left AIG in 2005.

But the government confirmed for the court Monday–as it had indicated Friday in a letter to Greenberg’s legal team–that it won’t call Greenberg himself.

Mr. Greenberg ran AIG for nearly 40 years, transforming it into a global powerhouse. He was its biggest individual shareholder when it was bailed out by the government in September 2008.

The 89-year-old is the driving force behind the lawsuit, which accuses the government of overstepping its legal authority in demanding a 79.9% equity stake in the company in exchange for providing an emergency $85 billion loan in September 2008, among other stiff terms. Yet the government had apparently considered calling him to bolster its defense.

Instead, government lawyers are calling Mr. Smith. In a pretrial filing, they said they might call Mr. Smith to testify about AIG’s financial condition and efforts to secure a private investment in AIG starting in 2008.

The government is wrapping up its case this week.