U.S. Urges Judge to Bar Geithner Role in AIG Lawsuit

January 22, 2010

The federal government is opposing a man’s request to take the deposition of Treasury Secretary Timothy Geithner in a lawsuit that challenges the bailout of American International Group Inc.

A lawsuit was filed in 2008 on religious grounds, claiming the government should not have bailed out AIG because the insurance giant sold financial products specifically tailored to Islamic principles.

The plaintiff, Kevin Murray, is being represented by an Ann Arbor firm that takes cases on behalf of Christian causes.

In a court filing last week, government attorneys called the deposition a “fishing expedition,” and said there are no extraordinary circumstances that would require Murray’s lawyers to interview Geithner for three hours.

“High-level government officials would be paralyzed from carrying out their extensive duties if they were subject to deposition in every civil action against their agency,” the Justice Department said.

The government said there are limits to unwinding the decision-making process of the executive branch.

Government lawyers said thousands of documents have been made available, and other officials familiar with the bailout have already been deposed.

Geithner was head of the Federal Reserve Bank of New York in fall 2008 when AIG, based in New York, first received help.

“Secretary Geithner is uniquely situated to testify as to the mechanics and rationale of the government’s bailout of AIG, including decisions related to the expenditure of federal funds,” wrote the plaintiff’s lawyer, David Yerushalmi.

The lawsuit says AIG sells Takaful insurance, which is based on communal assistance that has been accepted by some Islamist religious officials.

U.S. Magistrate Judge Mona Majzoub is scheduled to hear arguments Feb. 8.

In May, U.S. District Judge Lawrence Zatkoff denied a request to dismiss the lawsuit at an early stage, saying the case raises questions about whether the government is promoting religion.

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