AIG received government bailout money to save them from bankruptcy. Maurice “Hank” Greenberg, former CEO of AIG and current CEO of Starr International is suing the United States government. While Greenberg was CEO of AIG, they received $182 billion in bailout money. Starr International was the largest shareholder in AIG. They are now suing on behalf of AIG for alleged Fifth Amendment violations. They are seeking $25 billion in damages. This is a joke, right? The epitome of “frivolous”, right? Well, unfortunately, it is true.
There were two suits filed. One suit was filed in the U.S. Court of Federal Claims in Washington and the other was filed against the New York Fed in U.S. District Court in Manhattan.
The Fifth Amendment of the U.S. Constitution:
“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
How could the U.S. violate AIG’s Fifth Amendment right?
The lawsuit claims that during the government bailout, AIG was not offered any other option besides the government purchase of 563 million shares that effectively saved the company from bankruptcy. The shareholders consider this an illegal seize of their personal property. That’s quite a stretch even for Wall Street executives to make.
Is this helping the Occupy Wall Street movement or instigating more protest? For anyone that didn’t previously support the Occupy movement, you might want to reconsider especially if this lawsuit ends in favor of Starr International.