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Timimy in trouble - Geithner’s Fed told AIG to hide “backdoor bailout”

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The Federal Reserve Bank of New York, during its $180 billion bailout of American International Group, Inc., instructed AIG to omit details of its purchase of certain toxic assets from a December 24, 2008, Securities and Exchange Commission filing, according to e-mails between the company and the Fed released Thursday.

Using bailout money provided by the Fed, AIG paid a number of banks 100 percent of the face value of credit-default swaps, contracts tied to subprime home loans, at a time when other institutions were negotiating deep discounts for the paper. The names of the banks were also omitted from the SEC filing.

The information was finally disclosed in March 2009 after the SEC challenged AIG’s filing, prompting lawmakers and analysts to call the transactions a “backdoor bailout” of the banks. Topping the list of banks which benefited from the backdoor bailout of their toxic paper were Goldman Sachs and Societe Generale SA.

AIG New York

The e-mails, released Thursday by Rep. Darrell Issa (R-Calif.), ranking member of the House Oversight and Government Reform Committee, show the Fed wanted a number of other details about the AIG bailout withheld or their disclosures delayed.

The coverage from Bloomberg News has all the gory details, including a non-denial denial that Treasury Secretary Timothy Geithner, who was then chairman of the New York Fed, had anything to do with the cover-up.

Rep. Barney Frank (D-Mass.) has called the disclosure “troubling” and plans to hold hearings on the issue, though he publicly maintains full confidence in Geithner.

“The new details revealed today regarding AIG’s bailout in 2008 come as no surprise to those of us who believe that the American people deserve full transparency from the Federal Reserve,” Rep. Ron Paul (R-Texas) said in a statement. “My strong suspicion is that secret arrangements between cronies like this are not an anomaly, but the norm.”

The Fed, as you’ll recall, fought disclosure of the information, claiming that it would erode market confidence. No such thing happened, of course.

If dollar investors aren’t already spooked enough to run like hell, it’s hard to see what would convince them that the dollar isn’t nearly as safe as they seem to think.

“The status quo has made it entirely too easy and too tempting to behave recklessly with public funds in total secrecy,” Paul said. “The system needs radical change, but we should start with honesty, transparency and accountability to the American people about how their money is being handled.”

Update: TheNew York Times reported Friday that the Treasury department explicitly denied Geithner had anything to do with it. TheTimes quoted Treasury spokeswoman Meg Reilly as saying Geithner “played no role in these decisions and indeed, by Nov. 24, he was recused from working on issues involving specific companies, including A.I.G.”

Added: Jan-8-2010 Occurred On: Jan-8-2010
By: -suicidebomber-
Tags: Tim Geithner, AIG, Federal Reserve, Fed, bailout
Views: 6056 | Comments: 10 | Votes: 0 | Favorites: 0 | Shared: 1 | Updates: 0 | Times used in channels: 1
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  • Just look at this guy it seems like its the hardest thing in the world to see a smile on hes face he just looks wicked, they are all the same crooks, dont think its just obama thats a fraud all of hes crew are crooks and so where bushes and so where clintons and so where so on and so on, whats new you elect guys that are always RELATED that are presidents they pick the same exact staff of other presidents, hey its a classy chess game who are the pawns???????

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  • As Dodd fades into the scenery...hmmm.


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  • Once the hard evidence oozes out, as it inevitably does. obama will throw his slimy midget wizzkid under the nearest bus.

    Too many of his chosen inner circle keep screwing up.... heads have to roll otherwise people may conclude obama himself is incompetent. At the moment, he is not sacrificing anyone because he considers himself (B ) to still have the confidence of the people and does not need to.

    Probably, obama believes it would make him vulnerable for what amounts to admitting his repeated More..

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  • ,,,and while guys like this, and his buddies as well, are stealing us blind, taking our rights, and all that cash, we are told about a total false flag attack,

    The underware BOMBER, are you kidding me,

    BOMBER my ASS, this guy is a full on PATSY, total false flag attack, diversion from ecconomy, healthcare, PRIVACY, PROPERTY RIGHTS< FREEDOM, you name it,,, Go ahead call me what you like, while you and I are looking at this,, TIM GEITHNER, NANCY PELOS More..

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  • 8 families own joo

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  • Gee, Geithner helped out his buddies? You don't say...

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