Culture of Corruption Watch: Grilling Geithner; Video added
Photoshop/CoC card set credit: Tennyson Hayes
Complicit? Clueless? Incompetent? Corrupt?
All of the above.
Treasury Secretary Tim Geithner went before Congress today to answer (or not answer) questions about his role in the AIG bailout while he was chairman of the New York Federal Reserve. (See my backgrounder on the backdoor bailout payments to AIG’s counterparties here.)
Working on getting video, but looks like there were several choice moments of comeuppance, via Yahoo News/AP:
Treasury Secretary Timothy Geithner on Wednesday denied he played a role in withholding information about deals that sent billions of taxpayer dollars from the bailout of American International Group Inc. to big banks. His claim drew skepticism from lawmakers.
When President Barack Obama nominated the then-New York Fed chief on November 4, 2008, “I withdrew from monetary policy decisions…and day to day management of the New York Fed,” Geithner told a congressional panel.
“Many people, including people of this committee, have a hard time believing Secretary Geithner entered into an absolute cone of silence,” said California Rep. Darrell Issa, the committee’s top Republican.
My fave moment so far from GOP Rep. John Mica of Florida, who spanks Turbo Tax Tim:
“I played no role in those decisions,” Geithner said.
He said that he remained as president of the New York Fed and oversaw a wide range of other complicated dealings during that time.
“I will take complete responsibility for decisions I played a role in shaping,” he said.
But as to the AIG matter, he said, “I was not involved in decisions about what to disclose about the individual transactions or the names of counterparties. But I have enormous trust and confidence in the integrity and judgment of those who were.”
In a sharp exchange, Rep. John Mica, R-Fla., told Geithner “Either you were in charge and did the wrong thing or you participated in the wrong thing.”
Recalling the early controversy over Geithner’s failure to pay some personal income taxes, Mica said: “You gave lame excuses then, you are giving lame excuses now. Why shouldn’t we ask for your resignation as secretary of the Treasury?”
“You have a right to your opinion,” Geithner said.
Want to know what the stock market’s opinion is? Forbes: “Stocks Drift During Geithner Grilling; from House panel over NY Fed’s AIG bailout on his watch.”
***
Here’s the vid of the Mica-Geithner exchange, thanks to C-SPAN:
Issa’s op-ed in the Examiner: “Complicity or incompetence? The trouble with Tim Geithner and the New York Fed.”
It’s the blind leading the deaf — and all playing dumb.
***
Commenter Pasadena Phil adds:
It also came out that claims by Goldman Sachs’ Blankfein that his bank had hedged their exposure to AIG and so were not “bailed out” was not true.
Neil Barofsky,TARP Special Inspector General for the Treausure reported that the French bank regulators were willing to take less than 100% pay back for their stakes.
In other words, the NY Fed secrecy over the “who, what, when and how much” regarding the AIG payout to Goldman Sachs payout smells much worse today. There were clear opportunities to save many billions of dollars of taxpayer money here but Geithner/Paulson chose not to take them.
It really does look like a cover-up which is the main issue being addressed by today’s proceedings.
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You lie timmy!!! I hope those questioning him have some proof he was involved and he will purge himself.
L
Timmy said Lassie did it….
The cost of him being honest and the truth coming out is too high for Obama and the left. They will continue to rally around and build a firewall around Mr. Geithner because of the cost truth would exact especially at this juncture in Obama’s presidency.
(He said, to the sound of one hand clapping)
Well, you’d be the only one.
Because that would fly in the face of Hope And Change!
Like Sgt. Schultz in Hogans Heros
“I know nuzzing! Nuzzing!”
It also came out that claims by Goldman Sachs’ Blankfein that his bank had hedged their exposure to AIG and so were not “bailed out” was not true.
Neil Barofsky,TARP Special Inspector General for the Treausure reported that the French bank regulators were willing to take less than 100% pay back for their stakes.
In other words, the NY Fed secrecy over the “who, what, when and how much” regarding the AIG payout to Goldman Sachs payout smells much worse today. There were clear opportunities to save many billions of dollars of taxpayer money here but Geithner/Paulson chose not to take them.
It really does look like a cover-up which is the main issue being addressed by today’s proceedings.
99: “What’s he saying Max?”
Max: “He’s saying ‘Get your knee off my chest’”.
Perhaps they can grill him in Chinese. He has a degree in Asian Studies, though I believe nowadays that’s called Ethno-Economics.
The way I see it is either Geithner is lying and he knew exactly what was going on or he knew nothing (as he claims) which shows his level of incompetence seeing as the importance that was placed on the bailouts by politicians.
Geithner’s position regarding the AIG 100-cents-on-the-dollar bailout is that he was not involved. He was too busy with “the president” saving the American economy to be involved in the day to day details of his job as President on the NY Fed and so had delegated those duties to his assistant.
And Truman was too busy saving the free world from tyranny to have been bothered with such details as whether to drop the A-bombs on Japan. Unbelievable.
He should be grilled with some fava beans and a nice Chianti. Th-th-th-th-th-th.
But But But, Turbo Tax is soooo confusing!!
And now Paulson is refusing to answer questions because “those questions should be referred to the NY Fed. I was not involved.”
Anybody remember the Martha Stewart case when her broker blamed his sales assistant for the trade? Yeah, it didn’t work then either.
Isn’t this the Barney Frank Whorehouse in the Basement Defense?
I don’t have any faith in this dog and pony show. Nothing will come of it… They publicly spank someone and then…nothing
all involved should be behind bars including bernake, geithner, and any of the lawyers at the SEC.
He lies frequently, but not particularly well. The standard Dem defense, trotted out by Hillary, Barney Frank, et al – “I’m stupid, ignorant and uninformed about what’s happening under my nose”.
You’re missing the big point here. This is about corrupt government, not corrupt Democrats. The AIG bailout happened under Bush.
“The AIG bailout happened under Bush.”
Technically yes. Did Bush know about it and put his stamp of approval on the details of it? Probably not.
Some of the stuff that happened at the end of the Bush administration, as you noted, is more about a system that is at its heart corrupt. Yes Bush was the President and yes this kind of stuff is one reason why conservatives do not and did not understand these kinds of things. But it isn’t about Bush in particular.
Stopping these kinds of things is WAY more than who is or who is not the President.
Who helped or actually wrote the TARP Bill?
“Who helped or actually wrote”
An left liberal socialist think tank.
That is exactly my point. Today’s hearings are about exposing exactly how corruption is rampant regardless of which party is in power. Republicans should not be gloating today.
jsmiddleton4 said:
I thought that Geithner himself wrote it or had a major hand in it -
You are using the same excuse for Bush as Geithner used today for himself. Ignorance is no excuse for incompetence let alone crony capitalism.
This goes hand in hand with how TARP came into being:
“Sixteen months after the 11 a.m. simultaneous withdrawal of billions of dollars out of money market accounts in the aftermath of Lehman’s demise a few days earlier, no one seems to care about the dimensions of this event.”
“If nothing sinister was at work, then why so much secrecy concerning the destination of this $550 billion in money withdrawn on Thursday, Sept. 18, and those responsible for redirecting these funds out of the U.S. money markets.”
To this day, I have tried as hard as I can to find out what happened on this day and who or what entity did this and I come up empty handed. Hardly anyone talks or investigates this event. This is also how TARP came into being.
Watching Rep. Stephen F. Lynch (Democrat from Massachusetts)”chew out” Geithner at the hearing today shows yet another amazing benefit of electing Scott Brown to the Senate.
http://www.realclearpolitics.com/video/2010/01/27/ma_dem_chews_out_geithner_stinks_to_high_heaven.html
Even the Democrats in Massachusetts now know they have to be much more responsible about protecting the tax dollars of the American people.
Bernie Madoff’s future cell queen.
No, my point was about Geithner’s actions when he was head of the NY Fed (and since). The Federal Reserve is at least nominally independent of the administration – or at least it was, until the Obamessiah took over.
I wish…
What tonight’s speech needs is a laugh track. Bho will have no new ideas or real solutions for anything. Telling him that he lies just make him look like a victim, laughter would make him look foolish.
opps, wrong thread.
The Fed lost its independence forever when Bernanke teamed up with Paulson under Bush. Geithner was operating under the supervision of Bernanke as prez of NY Fed and merely continued Paulson policy once he replaced him. There is no escaping Republican culpability here. They are at least as guilty as the Dems here.
This is not a Democratic Party problem but a blatant government corruption problem. Notice how much talk of “recusing oneself” is being bandied about? How did these guys get appointed and approved with such glaringly abundant conflicts of interest? The US banking system is run by Goldman Sachs.
Its the cover up stupid!
Precisely.
Both political parties had their hands involved as to why the retail real estate market “bubbled” and then exploded late last year. What is ironic and troubling is how unconcerned-or should I say “tokenly concerened” John McCain, George Bush et al was with it while it was building.
John McCain could have walked into the White House had he grilled Obama’s own recklessness in encouraging bad R.E. loans to be made…he just wouldn’t do it.
Now McCain wants to deny “Helicopter” Ben Bernanke re-affirmation after he had already went along with Bernanke, Paulson and Geithner’s little plan?
Should I even give my reaction to this?
Neither political party is exempt from blame. Worse, we now have to deal with the reality of a de facto politicised Fed (thanks to at least Bernanke running about Capitol Hill seeking votes for his re-affirmation)…something that was not supposed to happen according to the origianl supporters of the Federal Reserve concept.
I’m predicting Geithner get’s “Holdered” and no charges are brought. Ever.
All very true, but that wasn’t my point. I was referring specifically to Geithner’s excuse and its recurring use by a series of Democrats over the years, not to the general culpability of politicians in general. If you’d like to understand what a slimeball Geithner really is, I’d refer you to the May 2009 issue of American Spectator.
Shame on me
I was hoping this was a Geitner on the Barbie piece.
Phil is absolutely correct. Both parties genuflected before the Great God Greenspan and at his prompting removed the financial cops from their beat in the name of deregulation. Both parties pocketed campaign contributions from the con artists who flourished as a result, then bailed out these crooks afterward. What’s been going on reminds me of an 18th Century British poem:
The law locks up the man or woman
Who steals the goose from the common
But lets the greater villain loose,
Who steals the common from the goose.
Actually, it gets worse. The decision to cover up the fact that AIG was using taxpayer money to pay 100% on the dollar to any claims that JP Mogan, Morgan Stanley or GS made with AIG was not really made by Geitner. The decision to cover up the payments was effectively made by the white shoe country club law firm of Davis, Polk and Wardwell. Davis, Polk and Wardwell has long represented the NY Fed and raked in millions of dollars of taxpayers money as legal fees. These same country club lawyers have a sense of entitlement that comes from being from old money. These aristocratic lawyers thought that the peaseants (us) should have no role in how our money is spent and further that we are not sophisticated enough to have a right to know. Geitner ceded all of the decisions to the aristocratic snobby old line lawyers who think they know what is best for the little people out there. Representing the Fed is nice work if you can get it. It sure beats bringing a lunch box to work.
Ah the grinning Romulan. I have complete confidence in him. At least he’s not Klingon.
Why is Congress listening to Tim Geithner’s opinion about their “rights” to disagree or “right” to their opinion? This man’s arrogance brushes on surpassing Obama’s.
Thanks Marc. I should add that several years prior to the financial collapse AIG (and others) were vacuuming up cash from regular folks with a scam called “premium financing.” Like credit swaps, it was so frightening that Congress looked at legislation to stop it, but they didn’t. That was the Democrat-controlled Congress. So there is plenty of blame to go around.
I thought it was run by the Bilderburg society.