5 hours ago
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Federal Reserve Board Chairman Ben Bernanke testifies before the Senate Banking, Housing and Urban Affairs Committee July 18, 2013 in Washington, DC.
Federal Reserve Chairman Ben Bernanke should testify in the lawsuit by American International Group Inc's former chief Maurice "Hank" Greenberg against the United States over the insurer's 2008 bailout, a judge ruled on Monday.
Judge Thomas Wheeler of the U.S. Court of Federal Claims rejected the government's effort to keep Bernanke from being deposed, saying the Fed chairman was a "central figure" in the decision to bail out AIG.
"Indeed, the court cannot fathom having to decide this multi-billion dollar claim without the testimony of such a key government decision maker," Wheeler wrote. "These facts constitute 'extraordinary circumstances' for the taking of Mr. Bernanke's deposition."
(Watch: Who will succeed Bernanke?)
Greenberg's Starr International Co, which once had a 12 percent stake in AIG, is suing over the government's taking of a 79.9 percent stake in the insurer in September 2008 and a separate 1-for-20 reverse stock split in June 2009.
Greenberg's attorney, Alanna Rutherford of Boies, Schiller & Flexner, said his team was pleased with the judge's decision.
Earlier this year Greenberg tried to force AIG to join his suit against the government over the $182.3 billion bailout, an effort the company ultimately rejected.
Greenberg is seeking tens of billions of dollars in compensation over the losses he incurred when the government rescued the company.
"Because of Mr. Bernanke's personal involvement in the decision-making process to bail out AIG, it is improbable that Plaintiff would be able to obtain the same testimony or evidence from other persons or sources," Wheeler wrote in his four-page order.
Wheeler said the court would extend "appropriate deference and courtesies" to Bernanke in scheduling the testimony; the judge also said he would attend the deposition himself.
It is tentatively scheduled for Aug. 16, the order noted.
Reuters contributed to thisreport.
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Years late and terabucks short blogging? Four years ago, Obama pivoted to the Axelrod-Geithner line that the decline had stopped, economic recovery was on the way and could handle itself, and that economic policy job #1 was stabilizing the long-term finances of the federal government. Now, after four largely wasted years spent mostly talking about the deficit, he may be pivoting back: "I want to make sure that all of us in Washington are investing as much time, as much energy, as much debate on how we grow the economy and grow the middle class as we?ve spent over the last two to three years arguing about how we reduce the deficits", Mr. Obama said. He called for a shift "away from what I think has been a damaging framework in Washington." This is most welcome. Let us hope that it is indeed permanent. Now the first step is to strike a deal to get the Republicans in the Senate to confirm Mel Watt as head of FHFA, and then for FHFA and the GSEs to offer a conforming loan-rate refi (with equity kickers attached for those underwater) to every mortgage holder in America. That policy to clean out the credit-channel mess created by the housing finance disaster and housing bubble crash of 2004-2008 would have been good policy in 2009. It would have been good policy in 2010. It would have been good policy in 2011. It would have been good policy in 2012. And it would be good policy today. For the easiest and best way to fill up the flat tir ...
