Warren Buffett Questioned in AIG Probe; Greenberg May Take Fifth

Billionaire investor Warren Buffett (search) was questioned by regulators Monday in connection with federal and state probes into the insurance company American International Group Inc. (AIG), saying afterward, "I told them everything I know."

But the lawyer for Maurice "Hank" Greenberg (search), former chairman and chief executive of AIG, said his client would invoke his Fifth Amendment privilege (search) and decline to answer questions from the Securities and Exchange Commission and the New York attorney general's office in an appearance slated for Tuesday.

Lawyer David Boies said the large number of transactions being examined and that 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 Buffett's holding company, Berkshire Hathaway Inc. (search).

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

Spokesmen for New York Attorney General Eliot Spitzer (search) and the SEC, who are both investigating AIG's business practices and insurance transactions, had no comment on the possibility of Greenberg taking the Fifth.

When asked by reporters about Greenberg, Buffett replied, "I don't really know anything about that."

Greenberg was forced out in mid-March as allegations of improprieties mounted. Greenberg is scheduled to speak with regulators on Tuesday. When asked by reporters about Greenberg, Buffett replied, "I don't really know anything about that."

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 polishing a company's financial statements.

In the case under review, AIG purchased reinsurance from General Re in the fourth quarter of 2000 and first quarter of 2001. Investigators have said that 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."

AIG shares rose 29 cents to $52.20 on the New York Stock Exchange (search), but are near their recent 52-week low of $50.15.