WE DON'T HAVE TO WAIT for the outcome of the battle between American International Group (AIG) and its regulators to predict that it will affect how public companies can be governed in a world in which prosecutors are unconstrained by rules designed to protect the rights of the accused.

Maurice "Hank" Greenberg built AIG from a small insurance operation into a $100 billion powerhouse, taking him to the pinnacle of America's financial and philanthropic establishments and becoming one of the "high flying, adored," to borrow from Tim Rice's Evita lyrics. From which perch he has fallen, and is now an unemployed executive scrambling to transfer over $2 billion in assets to his wife to shield them from prosecutors and private litigants.

In rapid order: Greenberg was labeled "a CEO who did not tell the public the truth" and charged with "fraud" on a television broadcast by New York attorney general Eliot Spitzer; was defrocked by his board; and was forced to invoke his Fifth Amendment rights against self-incrimination when hauled before a regulatory inquisition before he had time to study the thousands of documents underlying the charges against him.

The specific issue involves a complicated transaction that may or may not have illegally shored up AIG's earnings. But the way the game is now played, it matters little what the truth will prove to be. Spitzer threatened to destroy AIG by charging the company with criminal violations unless its board fired Greenberg--as he had earlier forced the board of Marsh & McLennan to unseat

The Spitzerization of companies goes like this: First, public accusation; then, threat of criminal charges and corporate ruin unless the accused waive their right to confidential access to counsel, and the board fires its CEO; and, in the end, a cash settlement in lieu of a trial that would determine the truth of his charges. Even this defender of Sarbanes-Oxley and corporate reform worries whether the happiest of ends justifies these means.

Spitzer has set a pattern that others will follow, especially if his self-described role as a latter-day Theodore Roosevelt, who smote "malefactors of great wealth," propels him into the governor's chair and the White House, as it did Teddy. Which means that only the dimmest of old-dog CEOs will refuse to learn some new tricks.

THE FIRST TRICK is that reputation counts, witness the different treatment received by Greenberg and Warren Buffett, boss of Berkshire Hathaway and its insurance subsidiary, General Re Corp. Both men were involved in the transaction that moved Spitzer to act, but Greenberg is the object of the investigation while Buffett was called merely as a "witness."

One reason is Buffett's reputation as man willing to cooperate with regulators, compared with Greenberg's policy of challenging them when he thinks he is in the right. Buffett long ago helped a leading investment bank to survive a major scandal involving trading of treasury securities by cooperating fully with regulators. This time around, he directed his executives to turn over every scrap of information they had that might be of interest to Spitzer. And when asked to testify, he told regulators "everything I knew" about the transaction, which he contends wasn't very much.