Ex-AIG Boss Greenberg Takes the Fifth

The former head of American International Group Inc. (AIG), Maurice "Hank" Greenberg (search), on Tuesday refused to answer questions from regulators looking into improper accounting by the insurance powerhouse, officials present at the meeting said.

The meeting, in New York, lasted about 45 minutes, said the officials, who declined to be named.

Greenberg's attorney David Boies (search) had said on Monday in a statement that his client would not answer questions because he needed more time to prepare for the testimony with the U.S. Securities and Exchange Commission and New York Attorney General Eliot Spitzer (search).

Investigators had denied requests to delay the testimony, Boies said, adding that the probe involves thousands of documents and relates to a "great number of transactions," some dating back as much as 20 years.

"It was a quiet, cordial meeting," a spokesman for Greenberg's legal team said afterward.

In the United States, a person can invoke the Fifth Amendment to the Constitution and decline to answer questions that might be self-incriminating.

The regulators had 40 pages of questions for Greenberg. They plan to call other people at AIG for questioning over the course of the investigation, and may later recall Greenberg.

On Monday, billionaire investor Warren Buffett told regulators in a meeting he did not know details of a suspect $500 million transaction between the General Re Corp. unit of his Berkshire Hathaway Inc. (BRKA) and AIG, according to a source close to the investigation.

Investigators are examining the 2000-2001 deal for evidence that it improperly boosted AIG's reserves and was accounted for incorrectly.

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, Buffett said, "No. We complied with the subpoena."

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.

Greenberg was forced out in mid-March as allegations of improprieties mounted. 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."