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Special Reports Last Updated: Sep 23rd, 2008 - 00:42:36

AIG is a �special case�
By Wayne Madsen
Online Journal Contributing Writer

Sep 23, 2008, 00:18

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(WMR) -- The U.S. government�s bail out of insurance giant American International Group (AIG) comes as no surprise to intelligence community insiders. In fact, AIG has been at the center of a number of CIA operations for decades.

The federal government�s $85 billion �bridge� loan to AIG essentially makes the United States government an 80 percent stakeholder in AIG, a move that will prevent external players from peering into AIG�s myriad intelligence operations on behalf of the CIA, according to an insider who has followed AIG�s overseas operations for a number of years.

As attorney general of New York State and as governor, Eliot Spitzer made AIG a prime target for his investigations. That ended when Spitzer was brought down in a sex scandal involving a prostitution ring.

AIG�s chairman, before he was forced to resign amid scandal, was Maurice �Hank� Greenberg. In 1962, Greenberg was hired by AIG�s founder, Cornelius Vander Starr, the uncle of President Bill Clinton prosecutor Kenneth Starr, as the chief of AIG�s North American operations. Greenberg eventually took over as AIG�s chairman, as well as assuming the chairmanship and CEO position of Starr�s other firm, C. V. Starr and Company. Greenberg retained control of C. V. Starr and Company after having stepped down as AIG�s chairman in 2005.

Greenberg, a close friend of Henry Kissinger, was considered a potential CIA director in 1995 after James Woolsey resigned. Perhaps it was Greenberg�s past connections to Whitewater Independent Counsel Starr�s uncle Cornelius that dissuaded Clinton from giving Greenberg the keys to Langley�s top executive washroom.

However, Greenberg and AIG had a long association with the CIA, according to WMR�s sources. AIG�s intelligence operations in Asia even pre-date the CIA and its predecessor, the wartime Office of Strategic Services (OSS).i Greenberg has served as a member of the National Intelligence Council.

Cornelius V. Starr started AIG as �American Asiatic Underwriters� in 1919 in Shanghai. Starr moved AIG from Shanghai to New York after the Communists came to power in 1949. Ironically, AIG is back in China through its ownership of People�s Insurance Company of China. AIG also owns AIG Korea Insurance.

Ever since the days of Ken Starr�s uncle, Cornelius, AIG has, on behalf of U.S. intelligence, kept tabs on rising players on the Asia political scene, particularly in China, Japan, Korea, Singapore, Hong Kong, Taiwan, and other countries. The quid pro quo for AIG is that it has weathered the storms generated by Spitzer and the global financial meltdown with the strong support from the U.S. government in return for permitting the mining of data from AIG�s insurance files by the CIA.

Greenberg has maintained close relations with the Beijing leadership over the years. However, his dealings with the CIA are also well known to the Chinese intelligence services. In fact, Chinese intelligence is aware that Greenberg has allowed AIG to be used as a major �placement� operation for a number of the CIA�s Asia-based non-official cover (NOC) officers.

The CIA�s analysts who concentrate on Asia have also enjoyed routine access to a huge AIG database maintained in San Francisco. AIG�s new building in Hong Kong was intended to be a major outpost for CIA agents assigned the China �beat.� However, Chinese intelligence succeeded in thoroughly wiring the building with surveillance systems and AIG�s China operations were blown. Chinese intelligence could not believe how sloppy Greenberg and the CIA were in handling the Hong Kong operation.

With the U.S. government now in control of AIG, the Bush family will breathe particularly easier. On June 20, 2005, WMR reported the following concerning the connection between Greenberg and the Bushes:

�The investigations of the secret Bush money tranches are coming to the fore as New York Attorney General Eliot Spitzer focuses in on the scandal involving Maurice �Hank� Greenberg and the inflation of the worth of American International Group (AIG) through shady affiliates, including AIG reinsurer Coral Re of Barbados. Greenberg was the CEO of AIG but was forced to step down amid the Spitzer probe. AIG was founded from Asia Life/CV Starr, a Shanghai-based international import/export and insurance firm founded in 1919 by Cornelius V. Starr, an Office of Strategic Services (OSS) operative in Southeast Asia during World War II. AIG�s largest shareholder is Starr International Company (SICO), an off-shore corporation incorporated in Panama with headquarters in Bermuda. Kenneth Starr, the independent counsel who prosecuted President Clinton, is the nephew of Cornelius Starr. Greenberg inherited the CEO job and Chairmanship from Starr as well as the $3.5 billion Starr Foundation.�

Previously published in the Wayne Madsen Report.

Copyright � 2008

Wayne Madsen is a Washington, DC-based investigative journalist and nationally-distributed columnist. He is the editor and publisher of the Wayne Madsen Report (subscription required).

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