Judges fault Spitzer on case against Greenberg over charity funds

One of Eliot Spitzer’s more contentious cases from his years as attorney general in New York was criticized by a panel of retired judges who discounted his claims that insurance executive Maurice R. “Hank” Greenberg cost his mentor’s charity $6 billion.

In 2005, Spitzer accused Greenberg of participating in financial transactions 35 years earlier. Spitzer said Greenberg’s conflicts of interests hurt the foundation that provides money to colleges while benefiting Greenberg and his company, American International Group Inc.

Spitzer criticized Greenberg’s role as executor of the estate of his mentor, Cornelius Vander Starr, who created a worldwide network of insurance companies including AIG in the early 1900s. Spitzer’s claimed the foundation could take civil action to recover $6 billion owed it from decisions made by Greenberg.

“Executors (of the Estate of C.V. Starr) acted in good faith and prudently performed their duties, and … there is no basis for the A.G. report’s contention to the contrary,” according to the panel’s report. “The independent committee has concluded that it would not be appropriate, nor would it be in the best interests of The Starr Foundation, to pursue any litigation or other course of action against the executors, whether in their capacity as executors or as directors of The Starr Foundation.”

The foundation’s board of directors created the panel of retired judges and Florence Davis, president of the foundation.