January 12, 2006 | Read Time: 2 minutes
Attorney General Eliot Spitzer of New York says a high-profile philanthropist cheated the Starr Foundation out of millions of dollars through financial dealings that took place more than 35 years ago.
In a report made public last month, Mr. Spitzer said the New York-based Starr Foundation was defrauded by Maurice R. (Hank) Greenberg, former chairman of the American International Group, and other former executives of the insurance company who were executors of the estate of Cornelius Vander Starr.
Mr. Starr was the entrepreneur who started the American International family of companies and the Starr Foundation.
In a letter to the Starr Foundation, Mr. Spitzer urged the organization to form a committee to examine possible courses of action, including legal steps to recover assets.
‘An Insult’
Mr. Greenberg and the other executives said in a statement that Mr. Spitzer’s allegations were false, “outrageous, and an insult” to the executors of Mr. Starr’s estate, who followed federal and state laws, and to the trustees of the Starr Foundation.
“Mr. Spitzer’s attempt to infer improper intent — 37 years after the events in question, on a record eroded by time and long after the statute of limitations has expired — is absurd and politically suspect,” said the statement by Mr. Greenberg and his colleagues.
“The people of New York deserve an attorney general who is intent on fighting crime and solving the state’s problems, not harassing its citizens and philanthropic organizations,” the statement said.
$2-Million Sale
According to Mr. Spitzer, after Mr. Starr died in 1968, Mr. Greenberg and his associates sold assets of the Starr estate for $2-million to companies that they controlled.
Mr. Spitzer said that if the executors had disposed of or handled the holdings differently, their value to the main beneficiary of the estate, the Starr Foundation, would be more than $6-billion today.
Mr. Greenberg is chairman of the Starr Foundation, which is one of the country’s largest grant-making institutions, with assets of $3.5-billion. The foundation supports education, health care, and other projects.
In a statement, the Starr Foundation’s president, Florence A. Davis, worried the report by the attorney general might hurt the foundation.
“While the Starr Foundation respects the authority of the attorney general to supervise charitable foundations, and to investigate alleged improprieties,”she said, “the foundation is concerned that allegations concerning a judicial proceeding closed more than 25 years ago, and the negative publicity attendant thereto, may adversely affect the value of the assets of the foundation, without discernible purpose.”
Mr. Spitzer’s report and his letter to the Starr Foundation can be found on his office’s Web site (http://www.oag.state.ny.us).
