The scandal roiling insurance giant American International Group Inc. could weaken the chances of one of the company's prominent directors to succeed Alan Greenspan as Federal Reserve chairman, several economists and political observers have said in recent days.
AIG director Martin S. Feldstein, 65, president of the National Bureau of Economic Research and once the chief economic adviser to President Ronald Reagan, has been considered among the top three candidates for the Fed job, according to economists and political operatives on Wall Street and in Washington.
 
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But AIG recently reported that it may have overstated its net worth by about $1.7 billion through a variety of questionable transactions. Its longtime chairman and chief executive, Maurice R. "Hank" Greenberg, was forced to give up those titles and is scheduled to give a deposition to investigators today.
Feldstein, an AIG director since 1988, serves on the board's finance committee but is not a member of the audit or compensation committees. He was among several of the company's outside directors whose institutions received donations from the Starr Foundation, a nonprofit organization controlled by Greenberg, The New York Times reported Sunday.
The NBER, which publishes working papers on economic topics, received more than $2.6 million during 2001 and 2002, according to AIG's latest proxy statement, filed nearly a year ago. The document said NBER did not intend to seek more money from the Starr Foundation.
Feldstein has not been implicated in the accounting problems, but his association with the company "could have some resonance" as President Bush and top White House officials evaluate the candidates for Fed chief, said Thomas Schlesinger, executive director of the Financial Markets Center, a nonprofit research institute that follows the Fed.
Feldstein's connection to AIG may be "relatively innocuous" by itself, Schlesinger said. But, he said, "the Bush administration has been very sensitive to corporate scandal and has put distance between itself and any whiff of corporate scandal."
Former FBI director William H. Webster, for example, had been chosen in 2002 to head the federal accounting oversight board created in the wake of the scandals at Enron Corp. and WorldCom Inc. But he withdrew his name from consideration after it became public that he had served as a director and head of the audit committee of U.S. Technologies Inc., a Washington manufacturer whose chief executive, C. Gregory Earls, was later convicted of defrauding investors.
U.S. Technologies ceased to exist as a publicly traded company as part of a settlement with the Securities and Exchange Commission. The controversy also contributed to the resignation of Webster's sponsor for the accounting board job, Harvey L. Pitt, as chairman of the SEC.
Bush administration officials declined yesterday to comment on Feldstein's chances for Fed chief. "We don't comment or speculate on personnel matters," said Assistant Treasury Secretary Robert S. Nichols, adding that Treasury Secretary John W. Snow "holds Marty Feldstein in high regard."
