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Federal court rules: There will be no interlocutory appeal and Plaintiff’s discovery into the government’s fraudulent takeover of AIG will continue.
February 02, 2010

February 2, 2009 – Port Huron, Michigan: Federal district court judge Lawrence P. Zatkoff rejected today the Treasury Department’s and the Fed’s effort to prevent any further discovery while the government attempts to convince the Sixth Circuit Court of Appeals to overrule Judge Zatkoff’s earlier ruling rejecting the government’s motion to dismiss the federal lawsuit challenging the government’s takeover of AIG on First Amendment-Establishment Clause grounds. 

The lawsuit, captioned Murray v. Geithner et al., was brought by attorneys David Yerushalmi and Robert Muise, representing the plaintiff, Kevin Murray, a taxpayer and former combat Marine who served in Iraq. The federal lawsuit alleges that the U.S. government’s takeover and financial bailout of AIG was in violation of the Establishment Clause of the First Amendment.  

Specifically, at the time of the government bailout (September – December 2008), AIG was (and still is) the world leader in promoting Shariah-compliant insurance products. Shariah is Islamic law, and it is the identical legal doctrine that demands capital punishment for apostasy and blasphemy and provides the legal and political mandates for global jihad followed religiously by the world’s Muslim terrorists. By propping up AIG with tax payer funds, the U.S. government is directly and indirectly promoting Islam and, more troubling, Shariah. 

After the court rejected the government’s motion to dismiss the case and granted Plaintiff’s attorneys until May 2010 to conduct discovery into the AIG takeover, the government filed a motion asking Judge Zatkoff to certify the case for immediate appeal of his denial of the motion and to stay all further discovery. Today the government got its answers: No and no. 

In what is an extremely well-written opinion, Judge Zatkoff scolded the government lawyers for filing the wrong motion at the wrong time and then proceeded to tell them they would have lost in any event because his earlier denial of their motion to dismiss was proper and well-considered. 

The Court’s decision today is especially timely and critical for Plaintiff Kevin Murray because his attorneys had previously filed a motion to compel Secretary Timothy Geithner to sit for a three-hour deposition. The basis for the “extraordinary” move to depose a sitting Treasury Secretary arose because Plaintiff’s counsel had earlier deposed the witnesses provided by the Treasury Department and the Federal Reserve Board and the government witnesses either testified inaccurately or feigned ignorance. The only one with all the answers turns out to be Secretary Geithner. 

While forcing high government officials to sit for a deposition in civil litigation is extraordinary, federal rules allow a court to take this step when the government official has personal knowledge of a relevant element of the litigation and where the moving party has no reasonable alternative. In this case, attorneys Yerushalmi and Muise argued in their court papers that this exception fits their circumstances in spades. 

“The witness designated by the government to testify on behalf of the Fed was less than forthright in his sworn testimony,” Plaintiff’s counsel Robert Muise of the Thomas More Law Center explained.  “To his credit, he admitted he had prepared for his deposition by reading media reports and not actually reviewing the relevant documents. That might suggest that his lack of candor was willful blindness.” 

David Yerushalmi, who is co-counsel with Robert Muise, laid out the grounds for the motion:  

At the time of the takeover decision, Secretary Geithner was the head of the Federal Reserve Bank of New York and he was the leading advocate of the AIG takeover. Moreover, he designed how the U.S. government would not only bail out AIG with taxpayer dollars, but how the government would illegally take control of 80% of the voting shares through what was patently an illegal and invalid trust arrangement. It is apparent from the discovery we’ve conducted to date that this was done purposefully and with an intent to conceal the illegal takeover with a fraudulent trust. 

Attorneys Yerushalmi and Muise want to ask Secretary Geithner:

·         Why he forced AIG to take on so much debt that AIG’s credit rating, already in peril, was sure to collapse without yet additional government funds, essentially guaranteeing AIG would remain a ward of the state?

·         Why he imposed such Draconian terms on AIG that there was no way it could survive without additional billions from U.S. taxpayers?

·         Why he then used AIG to secretly funnel 100% payoffs to AIG’s counterparties, including his colleagues and friends at Goldman Sachs, Merrill Lynch, and the European giant, Société Générale.  In other words, why did Geithner decide to destroy AIG’s chances of survival as a private entity while surreptitiously saving and preserving private ownership of other domestic and foreign financial companies? And,

·         Why he took control of 80% of AIG’s voting shares without legal authority to do so and used a fraudulent trust arrangement to conceal the illegal takeover? 

About David Yerushalmi, Esq.: David Yerushalmi has been practicing law for 25 years. He is a litigator specializing in securities law, public policy relating to national security, and public interest law. Mr. Yerushalmi is licensed and practices in Washington D.C., New York, California, and Arizona and currently serves as General Counsel to the Center for Security Policy in Washington, D.C., one of the nation’s leading national security think tanks founded by former Reagan administration official Frank J. Gaffney, Jr., and has been Of Counsel and Senior Legal Advisor for Policy Affairs to the Institute for Advanced Strategic & Political Studies (Potomac, Maryland) since 1988. 

About Thomas More Law Center: The Thomas More Law Center defends and promotes America’s Christian heritage and moral values, including the religious freedom of Christians, time-honored family values, and the sanctity of human life. It supports a strong national defense and an independent and sovereign United States of America. The Law Center accomplishes its mission through litigation, education, and related activities. It does not charge for its services. The Law Center is supported by contributions from individuals, corporations and foundations, and is recognized by the IRS as a section 501(c)(3) organization. You may reach the Thomas More Law Center at (734) 827-2001 or visit our website at www.thomasmore.org

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