Bernanke does not have to testify in AIG bailout lawsuit: ruling

Wed Oct 16, 2013 4:14pm EDT
 
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By Aruna Viswanatha

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke does not have to testify in the multibillion-dollar lawsuit by the former chief of American International Group Inc (AIG.N: Quote) against the United States over the insurer's 2008 bailout, a federal appeals court said on Wednesday.

The ruling, from the U.S. Court of Appeals for the Federal Circuit, overturned a lower court decision from July that said Bernanke should submit to a deposition by lawyers for former chief executive Maurice "Hank" Greenberg.

Deposing Bernanke while he is in office could disrupt "significant" ongoing government activities, the panel said.

Greenberg's Starr International Co, once AIG's largest shareholder with a 12 percent stake, also did not meet the legal threshold to depose senior government officials and have access to the Fed's deliberative process or Bernanke's mental processes, the panel said.

"Starr's efforts to inquire into these issues have all the appearance, and vices, of a fishing expedition rather than an effort to establish legally material facts," it said.

Bernanke is due to step down from his role in January. The panel said Starr could seek Bernanke's testimony after he left that position, but would have to better make the case in order to obtain that testimony.

A lawyer for Starr, David Boies, said they would seek to depose Bernanke after he leaves office.

"We are confident that we can make the showing of the importance of this testimony that the Court requires," he said in a statement.   Continued...

 
Ben Bernanke, chairman of the Federal Reserve, listens to a presentation during the "Community Banking in 21st Century" conference at the Federal Reserve Bank of St. Louis in St. Louis, Missouri, October 2, 2013. REUTERS/Sarah Conard