Culture of Corruption Watch: White House, Dems stand behind Geithner in AIG/backdoor bank bailout cover-up
Photoshop/CoC card set credit: Tennyson Hayes
Late last week, Bloomberg News reported that the New York Federal Reserve Bank — then under the leadership (or rather, lack of leadership) of Tim Geithner — presided over a systemic effort in the fall of 2008 to suppress public disclosure of ailing insurer AIG’s backdoor bailout payments to banks (I lambasted the corruptocrat NYFed/Geithner regime over the suppression on Fox & Friends last Thursday here):
The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show. AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.
The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms. “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”
Treasury Secretary Geithner’s defense?
He says he had no clue.
Late Friday night, the NYFed sent a letter to GOP Rep. Darrell Issa of the House Committee on Oversight and Government Reform underscoring how in the dark Geithner was:
1-8-10 Baxter Letter to Issa – AIG-Geithner
The ignorance card has worked well for the hapless tax cheat. It got him nominated and confirmed to his present position. And it’s saving his hide now. The White House and the Democrat majority are standing by Geithner.
Snap a picture of this Culture of Corruption group hug:
Treasury Secretary Timothy Geithner retains the confidence of President Barack Obama as he faces questions about why the Federal Reserve Bank of New York tried to withhold details of the government’s financial-industry rescue, administration officials said.
Aides to top congressional Democrats also said that Geithner has support on Capitol Hill as lawmakers prepare hearings into why the New York Fed in December 2008 asked American International Group Inc. to scale back disclosures of the government’s $182.3 billion bailout of the New York-based insurer. The Treasury Department said Geithner, 48, recused himself from such deliberations after Obama picked him to be Treasury chief the previous month.
But House Republicans are turning up the heat. Crank it higher:
Following the release of e-mails revealing the New York Federal Reserve’s apparent efforts to suppress disclosure to federal regulators of AIG bank payments during the financial crisis, the lead House Republican on the Joint Economic Committee is calling for a Joint Economic Hearing into the matter – with Treasury Secretary Tim Geithner as the lead witness.
In a letter to Democratic Chairwoman Carolyn Maloney of New York, U.S. Congressman Kevin Brady (R-TX) urges that Geithner testify before the committee and that Congress determine his “knowledge and complicity in the furtive efforts to discourage full disclosure to the SEC” of AIG payments to its banking counterparties.
“Given that Tim Geithner insisted on the sweetheart deals to the banks through AIG its not a stretch to believe he wanted them concealed, especially as he went through his vetting process in the Senate,” says Brady, who has called on the Treasury Secretary to resign for his failures as leader of economic recovery for the Obama Administration.
Brady says lawmakers should be concerned that this continues a pattern of lack of transparency by Geithner. The special inspector of the Troubled Asset Relief Program (TARP) has repeatedly criticized the Treasury Department for rejecting recommendations for more public transparency of TARP funds and for paying 100 cents on the dollar to AIG counterparties for nearly worthless credit-default swaps – a directive that cost taxpayers billions of dollars.
Democrat Rep. Edolphus Towns of N.Y. is also perking up his ears:
House Committee on Oversight and Government Reform Ranking Member Darrell Issa (R-CA) welcomed Committee Chairman Edolphus Towns’ (D-NY) interest in new questions raised by Issa’s investigation surrounding Tim Geithner and the Federal Reserve Bank of New York’s decision to pay billions of dollars to AIG counterparties.
“The week of January 18th, the Oversight Committee will hold a hearing in which Secretary Geithner and NYFRB General Counsel Thomas Baxter will be invited to appear,” Issa said. “Both Republicans and Democrats on this Committee have been waiting for more than a year to get answers from Secretary Geithner. The documents my investigation has produced show that AIG was pressured by the FRBNY to conceal information related to Mr. Geithner’s decision to pay billions of taxpayer dollars to counterparties of AIG’s credit default swaps – including Goldman Sachs, Société Générale, and Deutsche Bank – to retire the swaps at 100 cents on the dollar, instead of demanding any concessions from these firms. This decision was the subject of a report by the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) and the source of much public outrage.”
Issa added, “Should Secretary Geithner or anyone else this Committee wants to hear from decline the invitation to appear, they should be subpoenaed.”
And Issa gets to the heart of the matter:
“In the case of Secretary Geithner, he was presiding over unprecedented taxpayer-funded bailouts that would have tremendous consequences for the incoming Administration. Are we really to believe that Geithner “played no role in, and had no knowledge of” the AIG counterparty deal and the New York Fed’s effort to prevent AIG from disclosing details of a deal that ended up costing taxpayers tens of billions of dollars? If true, Secretary Geithner is admitting that as an unprecedented effort to stabilize Wall Street and the financial services sector was underway, he recused himself, thereby raising new questions on his competency.
If he truly played no role at all in any of this, I wonder if Secretary Geithner shares Tom Baxter’s understanding that he shouldn’t be informed about a deal that involved tens of billions of taxpayer dollars? Does he agree with the NYFRB’s attempts to pressure AIG to withhold disclosure of the counterparty deal of their SEC filings? Shouldn’t the standard for someone in his position be to instruct his subordinates to inform him as much as possible?
Remember: By his own admission, as I reported in Culture of Corruption, Geithner called his oversight of the financial meltdown during his NYFed tenure “inadequate.” He fostered Citigroup’s spending binge and engineered its $52 billion federal bailout, helped structure the $30 billion Bear Stearns bailout, and twiddled his thumbs in the corner while his staff directed AIG to hide details of the bank swaps that cost taxpayers an extra $13 billion on top of the $182 billion in public bailout funds it eventually reaped.
Despite all that, the White House and the Democrat majority, with cooperation from 10 Senate Republicans, put this fox in charge of the Treasury henhouse (don’t we have enough of those on the Hill?).
If these Beltway creatures refuse to drain the swamp, voters must do it themselves.
As commenter Flyoverman said in a thread earlier this morning: “The only ethics committee with any clout is an informed electorate.”
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Categories: Tim Geithner
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Eventually, this collection of corruptocrats will be crushed by their own corrupt behavior.
I just wonder how much actual money all these crooks in this bho and team have in some off-shore bank account at the taxpayers expense. When you think of the billions and the trillions that no one can account for, it makes me wonder. The stinken fed and the d’s will not let an audit be done to give us an answer. Gads, I am sick of this!
L
A man can dream. In the mean time, NOT.HOLDING.MY.BREATH
Get him MM. This stuff is way more important than the Reid ‘negro dialect’ garbage.
Nobody should be forced out of a job based on what they say. Lott shouldn’t have quit, Reid shouldn’t resign (because of his statements). I wish we actually had freedom of speech.
But this stuff is just corrupt. They are using their power to steal my crap and America’s crap. Somebody in the government is skimming off the top. With so much money sloshing around, millions can be pilfered without being missed.
Thanks for doing stuff that is important MM.
Drain the swamp? They’re making it bigger, and they’re doing it on purpose. The swamp is where they live; this is a form of habitat expansion.
Or as Yoda would say: “Mudhole?!? Slimy?!? My home this is!”
And donks circling the wagons around one of their own, who has committed questionable if not illegal behavior? Quelle Surprise…
Geithner= Obama Sockpuppet
Also, have you seen this nightmare rumor? Dodd as his replacement?
http://business.theatlantic.com/2010/01/dodd_to_treasury.php
Michelle, I am humbled. I will limit my comments to the one that you have so graciously noted.
My thanks.
Sadly, the degradation of the shining city that was once Washington, D.C. can never be washed away. No amount of lye soap can purify it.
It needs to go the way of Carthage, and Troy, and Ur.
Our new Capitol should be somewhere in Fly-Over country; a new shining city somewhere on the Great Plains.
I heard that Dodd decided not to run for re-election, not only that he couldn’t win but was expecting Obama to appoint him Sec. of Treasury, seeing that Geithner is in trouble. Couldn’t you see Dodd in that position. Corruption rules in this administration.
Put pointy ears on him and I swear Geithner looks like a damm Romulan. No wonder we’re in trouble. They’re at war with the Federation.
I vote Ottumwa, Ia or Toledo, Oh. Birthplaces of two of Americas greatest blue collar heros. . .Walter “Radar” O’Reilly and Maxwell Klinger. Radar because he could process the Pentagon paperwork without understanding it, and Klinger for his unwavering dislike of the U.S. Government while maintaining his undying patriotism.
He also sort of resembles Exeter and Brack from “This Island Earth”.
I don’t think it matters WHAT the Dems do. They will stick together. Geithner, Reid,et al it doesn’t matter. The conservatives can holler all we want. Remember They Won. Until they are eliminated one way or another, nothing is going to change. Who will stop them?
Obama’s entire administration is just one big bucket of maggots.
This just in:
Water is wet
well, I’ve faced the facts…. Our Government is run by a bunch of worthless Turds.
It’s not hard to follow what Geitner did with AIG. It is called a coverup. All of the big investment banks had made bets with AIG that certain mortgage securities would fail. They did not even have to own the bonds that they were betting would fail. And then when the US Government bailed out AIG with $181 billion or thereabouts, the investment banks demanded that AIG pay each claim one hundred cents on the dollar. And any insurance company handling a two bit auto accident case knows how to haggle over paying claims and the amount of the claims. And in the case of AIG, AIG should have done precisely that because many of the bets placed by the investment banks were nothing but pure profit. They didn’t even own the underlying securities. But wimps like Geitner told AIG to pay off the claims at 100 percent on the dollar. But since it was government money, we the taxpayers should have known about how our dollars were being used, not to prop up AIG but to pay off investment banks that in many cases didn’t own the underlying securities and the AIG CDSs were pure profit. But Geitner said “Hey guys, it’s OK to cover it all up. We Ivy League guys are smarter than everyone else and can do whatever we want”. Gosh this guy is a turkey.
That being said when the time comes to throw them out we can’t pick them up by the clean end. No more DIABLO’s.
Those chosen by TheOne could mug a little old lady on live TV and the best they’d get is a reprimand for littering after being seen throwing the club away…. What does it take to get any of these imposters investigated?
My Senators voted to confirm Geitner as “We need a brilliant mind at Treasury”.The man reminds me of America’s Most Wanted more than anything else.
We’ll not get any of these thieves investigated as long as the Democrats hold all three branches of government.Yes water is wet.
I love you Michelle and what you do, but some days, your neverending parade of miscreants and their nefarious ways, leaves me wanting for a hot shower with Liquid Plumber and a cheese grater loufa! I can’t believe I’m saying this, but, I WANT THE CLINTONS BACK! They weren’t this bad were they?
Even the Ferengi aren’t this slimy!
As a native Washingtonian I disagree. Politicians come and go but the local people are still there. You can move the seat of gov’t to Timbuktu, but the “corrupted temple monkeys digging through the ruins of America looking for bribes” will follow.
Jefferson was correct when he said the price of liberty is eternal vigilance.
Adams was dead on about our form of gov’t being for a moral and religious people and wholly inadequate for any other.
When and if the large majority American people agree on this then a silent coup of the voters will fix the problem. If we Americans don’t fix the problem, then we will be telling our children what a great country we used to live.
I think Bubba and the Seahag were just as corrupt, they just used smaller numbers….or more from the Chinese.
…the press corpse was just as dead then too.
I feel so dirty, I feel so used by the very government put in place to protect my rights. Where is responsibility to the average American? Where is respect for the tax paying little guy? When can we expect justice? Who will come forward to end this madness?
I voted, most all my cantidates lost. I volunteered to work the elections and went door to door. I ran for office myself and served for 12 years in my community. I attended our local Tea-Party, right to life rally, Republican fund raisers. I don’t deserve to be treated this way. These people in charge make all my efforts seem petty and ridiculous.
Thank You Michelle for fighting the good fight, if you do not waver neither will I.
Tax Cheat, Tax Cheat!
http://networkedblogs.com/p23923173
Erroll Southers is Obamas nominee to head the TSA. He thinks we should profile “Christian Identity Oriented” people. Not muslims. Christians.
Both He and Bernanke deserve a Public hanging. Nuff said. Save the tar and feathers for Reid, Pelosi, Boxer, Schumer and Barney Franks.
Nuff said.
SEC Orders AIG Info Sealed Until November… 2018!
TheFoundingFathers, et al,
This is why we need to take away their access to taxpayer money. The Federal Government should be limited by the enumerated powers ONLY. We do not need to send our money to Washington just so they can skim off what they want and return our own money back to our states. If your teenager misused a credit card you were paying for would you cut them off or increase their spending limit?
This may sound harsh to some, but I think it is the ONLY way THE PEOPLE can control THIER Govt.
First, OUTLAW THE LOBBIST! (This scum crawls out from under every rock in DC.)
Second, Make EVERY Elected Official Submit to Lie Detector Tests Randomly.
Third, CAPITAL PUNISHMENT for ANY ELECTED OFFICIAL caught Robbing the American Taxpayer/Voter.
By taking a HARD LINE against these people is the ONLY WAY to regain the Trust of the American People. Public TRUST is Sacred, they have NONE at this Time in our History.