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Greenberg comes out swinging

NEW YORK (Reuters) ? Maurice (Hank) Greenberg, the chief executive ousted by American International Group last year amid regulatory probes, stepped up his legal defence efforts by seeking New York attorney general Eliot Spitzer?s Spitzer?s e-mails, telephone records, internal memos, and computer records.

Greenberg?s team last week also prevailed in efforts to gain access to an internal report prepared for AIG?s independent directors last year, a spokesman said.

Getting the report is significant since it was an important source of information for Spitzer?s office, which filed a civil suit last May against AIG, Greenberg and former Chief Financial Officer Howard Smith.

The review also played a large role in the board?s decision to oust Greenberg after four decades running the global insurance giant.

AIG had previously claimed the report was privileged and confidential. ?We have many reasons to believe there was collusion between the attorney general?s office and AIG to blame Mr. Greenberg and other executives for actions at AIG and to justify the company?s decision to force Mr. Greenberg?s retirement,? Greenberg spokesman Howard Opinsky said.

?We?re requesting this information to see the facts buried deep inside the attorney general?s office that substantiates this claim,? he said.

Opinsky said the attorney general?s office has 20 days to comply or object to the document request.

Officials from Spitzer?s office were not immediately available for comment. AIG spokesman Christian Murray declined to comment.

If Spitzer refuses the request, Greenberg would have to show a judge he has a legitimate purpose, said Tom Curran, a former New York prosecutor. ?You can?t just go on a fishing trip,? said Curran, a lawyer at Ganfer & Shore LLP in New York. ?You can?t just get information for the sake of embarrassment.?

On Thursday Greenberg?s defence team asked New York State Judge Charles Ramos for permission to take a deposition of Spitzer, or the most knowledgeable person in his office, Opinsky said. Taking a cue from Spitzer?s playbook, Greenberg?s defenders are asking for access to e-mail and other documents related to his case.

Greenberg denies he did anything wrong and is preparing to defend himself in trial. Last April, he declined to answer questions citing his fifth amendment rights.

AIG has cooperated with regulators and has been in settlement talks for months. The company could pay as much as $1.5 billion, people familiar with the talks have said.

Last week?s court activity means the lawsuit will move forward, after months of delays, with pretrial discovery commencing.

Greenberg last March announced his retirement, a few days before AIG disclosed that a series of accounting errors overstated its book value by $1.7 billion. Earlier there had been allegations that Greenberg personally promoted insurance products sold by AIG that performed no function other than to smooth a customer?s reported earnings.

Spitzer said he will not pursue a criminal indictment against Greenberg, though there are also ongoing investigations by the US Justice Department and the Securities and Exchange Commission.

New York-based AIG, which argued the document was protected by attorney-client privilege, asked for ten days to prepare an appeal.

?We have many reasons to believe the AG colluded with AIG to concoct an investigation that would justify the forced retirement of Mr. Greenberg and baseless fraud accusation made by the AG on national TV,? said Greenberg lawyer Nicholas Gravante of Boies, Schiller & Flexner LLP. ?We intend to use every available legal option to force the AG to turn over all evidence to which Mr. Greenberg is entitled.?

AIG restated to correct reinsurance contracts and other transactions that the company said hid losses and understated liabilities.

Greenberg has argued that much of the restatement was unnecessary and driven by fear of regulators. Accounting adjustments by senior managers were never made without the knowledge of PricewaterhouseCoopers LLP, AIG?s auditors, he said.

AIG, also named in Spitzer?s suit, may settle for more than $1 billion, a person familiar with the negotiations said earlier this month. AIG spokesman Christian Murray declined to comment.

Shares of AIG fell 7 cents to $66.54 in New York Stock Exchange composite trading. The stock has risen 32 percent since Spitzer?s probe pushed it to an almost two-year low in April.