- The Washington Times - Monday, April 11, 2005

NEW YORK (AP) — Billionaire investor Warren Buffett was questioned by regulators yesterday in connection with federal and state probes into the insurance company American International Group Inc., saying afterward, “I told them everything I know.”

But the lawyer for Maurice Hank Greenberg, former chairman and chief executive officer of AIG, said his client would invoke his Fifth Amendment privilege and decline to answer questions from the Securities and Exchange Commission (SEC) and the New York Attorney General’s Office in an appearance scheduled for today.

Lawyer David Boies said the large number of transactions being examined and the fact that some occurred years ago “have precluded Mr. Greenberg from adequately preparing this testimony at this time.”

Among the transactions under investigation is one between AIG and General Re Corp., a unit of Mr. Buffett’s holding company, Berkshire Hathaway Inc.

Mr. Buffett spoke briefly to reporters as he left the Woolworth Building in Lower Manhattan, where the SEC has an office. Asked whether General Re turned over documents in exchange for leniency, Mr. Buffett said: “No. We complied with the subpoena.”

Mr. Buffett, accompanied by one man thought to be a Berkshire Hathaway attorney, entered a side door at the Woolworth Building yesterday morning, thus avoiding more than two dozen reporters and camera-crew members at the front entrance.

Spokesmen for New York Attorney General Eliot Spitzer and the SEC, who both are investigating AIG’s business practices and insurance transactions, had no comment on the possibility of Mr. Greenberg’s invoking the Fifth Amendment.

When asked by reporters about Mr. Greenberg, Mr. Buffett said: “I don’t really know anything about that.”

Mr. Greenberg was forced out in mid-March as accusations of improprieties mounted. Mr. Greenberg is scheduled to speak with regulators today.

The investigators are looking into a number of reinsurance transactions, which involve insurance purchased by insurance companies like AIG. Reinsurance traditionally has been used to spread out risk among insurers, but in some cases it has been used for the questionable purpose of burnishing a company’s financial statements.

In the case under review, AIG purchased reinsurance from General Re in the fourth quarter of 2000 and in the first quarter of 2001. Investigators have said AIG used the deals to pump up its reserves when markets were uneasy about the company’s outstanding liabilities.

AIG has said its accounting for the transactions with General Re “was improper and, in light of the lack of evidence of risk transfer, these transactions should not have been recorded as insurance.”

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