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September 25, 2014

Former AIG chief suing federal gov’t for $40B in taxpayer dollars

“David Boies has spent much of this year putting the celebrity in celebrity lawyer. In January, he and Ted Olson, his onetime Republican antagonist from Bush v. Gore days, were at the Sundance Festival for the premiere of “The Case Against 8,” a documentary about their crusade against California’s anti-gay marriage law. In May, they enjoyed the spotlight anew with the release of Forcing the Spring, Jo Becker’s book about the swift advance of same-sex marriage, which holds them up as heroes of the movement. In May, they even made an appearance on the New York Post’s Page Six after they did a film promo event in the Big Apple: “Ted Olson and David Boies Become Movie Stars For a Night.

“As the glitter has been swirling, though, Boies has been busying himself with a far less celebrated and less Hollywood-ready case called Starr International Co., Inc. vs. United States. In that case, which goes to trial next week, Boies is representing former AIG CEO Maurice “Hank” Greenberg and his new firm, Starr, in their lawsuit alleging that the federal government’s bailout of AIG in the midst of the 2008 financial crisis represented an illegal taking from AIG’s shareholders. The lawsuit, filed with the U.S. Court of Federal Claims in Washington, is seeking as recompense from the government the tidy sum of $40 billion.”

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“Boies has gone along for the ride—literally so, as he’s gotten to take flights on Greenberg’s private plane, not to mention raked in countless hours at his top-dollar rate. His rate is reportedly more than $1,200 an hour, though as a 2011 article explained, “more often his deals with clients involve alternatives such as pegging fees to his success.” He reputedly received $100 million for representing Greenberg in another AIG-related case in 2009. That he is now profiting far more from his 89-year-old vengeance-seeking client has more than a few in the financial and legal world criticizing Boies’ participation. Yes, every man deserves his day in court. But a lawyer can also let his client know when his desire for an emotionally-satisfying showdown simply doesn’t have much chance in court. Instead, Boies’ representation—both through his sheer reputation and his indisputable skill—has given Greenberg’s crusade more staying power than it otherwise would have had.

“No one ever writes about what [Boies] really makes his money on. He has got a huge firm with a lot of names on the masthead, and it’s not a pro bono firm,” said Dennis Kelleher, a former top Senate Democratic aide and litigation partner at Skadden, Arps, who now runs a pro-financial reform group called Better Markets. The AIG case, Kelleher continued, “is an outrageous example of ‘no good deed goes unpunished’ and second-guessing.” Boies, he said, “is a great lawyer and makes great arguments but the country better hope he doesn’t prevail. This crisis cost the economy $12.8 trillion in total [according to a Better Markets analysis] and then on top of that, David Boies is arguing that the U.S. taxpayers should send them checks because the U.S. taxpayers bailed them out from their reckless debts?”

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Read the full New Republic article by Alec MacGillis here.

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