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.