Court calls on Bernanke to testify

July 31, 2013 at 3:24 PM
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WASHINGTON, July 31 (UPI) -- A federal judge has ordered U.S. Federal Reserve Chairman Ben Bernanke to testify in a lawsuit concerning the 2008 bailout of American International Group.

Judge Thomas Wheeler of the U.S. Court of Federal Claims in Washington said that Bernanke was a central figure behind the government's reasoning for the bailout that shareholders in the lawsuit claim represented an unconstitutional government "taking," Courthouse News reported Wednesday.

"Because of Mr. Bernanke's personal involvement in the decision-making process to bail out AIG, it is improbable that plaintiff would be able to obtain the same testimony or evidence from other persons or source," Wheeler wrote in his ruling.

"Mr. Bernanke repeatedly has acknowledged that he was a key decision-maker on behalf of the government, and his testimony unquestionably is relevant to the Fifth Amendment taking and illegal exaction claims before the court," Wheeler added.

Wheeler has granted class-action status to the case in which lead plaintiff Starr International Co., has claimed the government forced its solution on a private company.

In the midst of the financial crisis, the government gave AIG an $85 million revolving credit line in exchange for a 79.9 percent equity stake in the company, the Courthouse News said.

Wheeler also said the court would be respectful of Bernanke's position, allowing the chairman "appropriate deference and courtesies," including "appropriate judicial oversight" and care that "proper and efficient use of time is maintained."

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