Can he get anything straight? TurboTax failed him. So, apparently, did Outlook calendar.
Hapless Treasury Secretary Tim Geithner claims he didn’t find out about the AIG bonus issue until March 10. This was contradicted by AIG president Edward Liddy’s testimony before Congress earlier this week. Liddy was right. Geithner was wrong. And it’s all on videotape. DealBlog this morning referenced a House hearing on March 3 in which Geithner was directly questioned about the specific bosnues, a full week before Geithner claims he was made aware of the impending controversy. C-SPAN archives has the clip (also now on YouTube):
And here’s the transcript now circulating on the Hill:
Full Question From House Ways And Means Committee Hearing, 3/3/09:
Rep. Joseph Crowley (D-NY): “Thank you, Mr. Chairman. Welcome to the committee, Mr. Geithner, and thank you for your responses so far. It never ceases to amaze me the level of apparent amnesia some of my colleagues on the other side of the aisle have had about how we got to this problem in the first place, and I thank you for answering Mr. Heller’s question in particular.
“By the line of questioning, you’re almost led to believe that because of a last month and a few days of a presidency we had the problem we have today, and thank you for setting the record straight. This didn’t happen overnight. This took eight years in the making of stagnant, at best, growth. But yesterday, Mr. Secretary, the Treasury and the Federal Reserve announced a new fourth plan to rescue troubled financial services giant AIG. I do agree that AIG’s sustainability is the lynchpin for some of our recovery efforts, and it’s important for the federal government to work to keep it afloat. However, I must demand that AIG increase the accountability and transparency, something that was not done during the previous administration.
“For example, just last month, AIG paid 343 employees of AIG FP — their Financial Products division that created the financial hole that AIG is in, and in turn a multibillion-dollar bill for American taxpayers — $56 million in bonuses and are slated to pay an additional $162 million in bonuses to 393 participants in the coming weeks. And there’s more. Further bonus payments totaling approximately 230 million (dollars) are due to 407 participants at AIG’s Financial Products division in March 2010.
“This makes no sense to my constituency. And I’m not here to bash compensation — we can go a little overboard as well — but this company claims to be on the brink of disaster and it’s handing out bonuses. I would like to work with you in structuring tough, commonsense compensation limits at AIG and this new government loan, which would include voiding these bonuses to AIG FP employees as well as claw back $56 million in bonuses already paid to AIG FP employees December 2008 and 2009, some of whom are not even American citizens but who are living large on taxpayer funds. Can you please share with us, this committee, your thoughts on taking these actions.”
Secretary Geithner: “Congressman, thank you. I just want to point out that compensation practice across the financial services industry over the last years and decades just got out of whack with basic fundamentals, and people were paid for risks that weren’t captured in compensation, and part of what we do to make sure this kind of crisis doesn’t happen in the future is to change those basic incentives, and there’s going to be a role for government in doing that.
“Now, it’s very important that we make sure that we’re providing exceptional assistance to these firms, that that assistance is going, again, to achieve the objectives of these programs, not to reward the kind of executives that got us in this mess. I’m deeply committed to that objective.
“The president laid out some very comprehensive conditions in his proposals last month. Congress passed as part of the recovery act a set of additional provisions. We are now in the process of designing regulations, guidelines to apply those provisions and we’re going to be as careful and responsive as we can to the concerns you have, so many Americans have about how these resources have been used. And I just want to say that the judgments made by these boards of directors and senior executives across parts of the financial have just caused a lot of damage to public confidence and the quality of their judgment, and they have a deep responsibility and obligation to make more careful judgments going forward.
“But we’re not going to be able to depend on them to do it. We’re going to make sure that there’s conditions that come with our assistance to assure that. So we’re going to figure out how to apply these new provisions in a way that’s as carefully designed as possible. Obviously, we want these businesses — we want to achieve the objectives of what we did in the IT. We want them to be able to run their business and restructure so that we’re in a better position going forward and that’s going to — that’s why this is sort of hard to do. But we’re going to be very careful in doing it and very much share your concern.”
How much longer does Geithner “take full responsibility” for his failings without suffering any consequences?
Side note: One of the congressional offices circulating the info comes from a GOP lawmaker who voted FOR the cover-their-backside confiscatory AIG bonus tax yesterday.
Related…Here’s my segment yesterday with Cavuto questioning when the expiration date on Geithner’s tenure will finally kick in:blog comments powered by Disqus
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Categories: Tim Geithner