Fed Pressed AIG to Limit Public Disclosures of Payments
EmailABC News’ Matthew Jaffe reports: The New York Fed, under the leadership of current Treasury Secretary Tim Geithner, pressed bailout recipient AIG in late 2008 to limit its public disclosures about the company’s payments to counterparties, according to emails obtained by ABC News. In one email, the New York Fed crossed out a reference that AIG was planning to make in a regulatory filing to paying counterparties such as Goldman Sachs and Societe Generale the full value of their credit-default swaps. That information was then excluded from AIG’s eventual filing in December 2008. In all, 16 of AIG’s counterparties – financial institutions in the US and abroad who had deals with the insurance giant – received $62.1 billion in taxpayer money after they were paid full value for their swaps, with Societe Generale raking in $16.5 billion in payments and Goldman Sachs $14 billion. “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information to the SEC,” Rep. Darrell Issa, the ranking Republican on the House Oversight & Government Reform Committee who first obtained the AIG emails, said in a statement today. “The American taxpayers, who own approximately 80% of AIG, deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” The actions of Geithner’s New York Fed during the AIG bailout have already come under fire on numerous occasions, most recently in a November 17 report from bailout watchdog Neil Barofsky, who wrote, “There is no question that the effect of FRBNY’s decisions – indeed the very design of the federal assistance to AIG – was that tens of billions of dollars of government money was funneled inexorably and directly to AIG’s counterparties.” In response to Barofsky’s November report, Treasury pointed out that extraordinary actions had to be taken during the extraordinary times of the fall of 2008, with the government attempting to stop a complete meltdown of the financial system. If AIG had defaulted on its commitments, the financial system could have again suffered the type of problems seen in the September 2008 collapse of investment bank Lehman Brothers. With the financial meltdown averted and signs pointing to the country emerging from its recession, the Federal Reserve expects its loans that financed the counterparty payments to be repaid in full.
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It is past time to fire Geithner, the rich man’s lackey – right after they fire the heads of the NSA, FBI and CIA. Hold the top guys responsible and that will roll down hill – believe me.
We need, demand change Mr. President and if we don’t get it your a one term president. And I’m a Democrat.
RandyT, USN Ret.
Posted by: RandyT | January 7, 2010, 3:57 pm 3:57 pm
Wall Street–the party of the GOP! NOT!
Posted by: Rich | January 7, 2010, 4:04 pm 4:04 pm
Honest mistake…move on…
Posted by: freedom | January 7, 2010, 4:09 pm 4:09 pm
This all occurred under on the Bush/Cheney/Paulson watch! I don’t like the smell of this. But all you Dem. haters need to understand some of us have calendars and memories longer than a house fly.
Posted by: B. Bear | January 7, 2010, 4:21 pm 4:21 pm
So much for public disclosure. If it’s about money, you can be sure that you’re not hearing the whole story. It’s a sad fact, but true. I’m a Democrat, and I do NOT trust the government, GOP or Democrat, to do work in the public interest. Sad, isn’t it?
Posted by: CarolB | January 7, 2010, 4:58 pm 4:58 pm
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Posted by: GSLaw | January 7, 2010, 5:33 pm 5:33 pm
how terrible!!! who tell the NY Fed to DO such a horrbile thing in this day and age of so called ‘trasnparency’… hmmmm… NY Fed reports to ‘printer press’ ben bernanke… ben bernanke is coordinating efforts with ‘tax-cheat’ timmy giethner… and little timmy reports to…. who again?? I KNOW.. that guy who recently said something about ‘the buck stops with him’…hhhmmmmmmm.. we live in a great day and age dont we? i didnt think so either.
Posted by: realman1963 | January 7, 2010, 6:15 pm 6:15 pm
Let me see, CEOs and principles at these companies got tremendous bonuses because they came through with billion of dollars when everyone else was losing their shirts. Could it be that we the tax payer provided that parachute. Oh no, they worked hard to get that money. BS. They should be held accountable for losing the 14 billion and their bonus reflect that poor decision, not be glorified for a wonderful magicians trick of being made whole through the government bailout.
Posted by: John | January 7, 2010, 6:23 pm 6:23 pm
What does Pres. Obama think of Geithner and his actions?
What else is being kept secret?
Posted by: ddg | January 7, 2010, 6:33 pm 6:33 pm
Everthing is done behind closed doors, these guys are worse than the mafia, then Obama tells the house and senate to get that health fiasco done quickly but behind closed doors, dont let it be televised cause it stinks and the voting public is against it. And you think Geithner is a crook.
Posted by: earl | January 7, 2010, 7:13 pm 7:13 pm
transactions are measured in the time-tested system of universal monetary exchange and
banking. Insist on 0.9999 fine GOLD available as coinage, bars, ingots, and bricks.
Posted by: GSLaw*****************************
Too bad the only one raking in the true value of
gold are pawn shops. They have a 35% clear profit
on the metal.
Posted by: spacerook1 | January 7, 2010, 11:26 pm 11:26 pm
No surprise here he is the same type of person who appointed him. He is a liar just like obama both have no character and are corrupt. He cheated on his taxes and should of never been appointed. None of these people can be trusted and we cant believe a thing that comes out of their mouthes. They all need to be fired and voted out!
Posted by: Stanley | January 8, 2010, 6:35 am 6:35 am
I wish this surprised me but it is Tim Geithner, a man that proved you can’t trust him with his checkbook never mind the countries.
Posted by: rick | January 8, 2010, 7:45 am 7:45 am
Timmy needs to go………. to jail!
Posted by: dot | January 8, 2010, 7:46 am 7:46 am
Federal reserve attempting to cover up its mistakes is nothing new but ABC reporting it is. Shocking! What mistake is being covered up? One of the duties of the federal reserve is “maintaining stability of the financial system and containing systemic risk that may arise in financial markets” (wikipedia). Nothing has changed!
Posted by: Robert | January 8, 2010, 8:47 am 8:47 am
The Obama administration has been as secretive about many things, as every administration that preceded them.
So much for “transparency in government”.
Posted by: Rick McDaniel | January 8, 2010, 9:17 am 9:17 am
Both parties can be held accountable, because both parties are controlled by zealots. Zealots are easy to manipulate. They need funding, are addicted to the dopamine rush of an argument and receive funding from the same sources – the extremely wealthy families throughout the world (think of Q Victoria’s grand children causing the greatest man-made disaster at the time – WW I). The philosophy of dividing and conquering provides the opportunity for the devious to steal. I do not know if any president can be considered an expert in economics, I think the best we can expect is a president who knows when an “expert” is either self-serving or representing the interests of a few. The corruption in our government may be on a scale the world has not seen since the Roman Empire. Our only hope is an educated, forceful and energized middle – with an emphasis on educated. I go to tea parties not just to show my displeasure with the direction of the government, but to make people understand how our health care system is not a good system for many Americans.
Mark Gilbert’s book, (available in late Jan ’10) Complicit.. seems to hit on the key points that lead to the scamming of Americans.
Posted by: John Clifford | January 8, 2010, 10:01 am 10:01 am
realman1963 – You are talking about Former President W Bush that “the buck stops here” as all of this occured during is administration. Correct?
Posted by: dlboggan | January 8, 2010, 4:47 pm 4:47 pm
anyone think our founders envisioned the manifestation of their dream for a free society to include a Capital Class that would purchase the 4th estate and our Political Class ? At what point do WE THE PEOPLE say enough. The Capital Class use their corporate assets, the managed media, and the Political Class to control us. We are free to do as we are told. The propaganda coming from teh media is both corporate propaganda and government propaganda. We need to vote out all incumbents in the mid-term elections. We need campaign finance reform. We need to audit the Fed. All of these action cut the purse strings of influence of the Capital Class.
There is a role for the Capital Class in society. But what is this role ? At which point does the evidence suggest that the Capital Class has too much influence over the people. Capitalism does not reward failure. The tax payer bail out of the CApital Class is a game changer. Just as we are told everything changed after 9/11 and that we must exchange freedom for security the same must be true with the Capital Class. The day you REQUIRED taxpayer $ to survive everything changed. WE NEED TRANSPARENCY. Giethrner’s apparent securities fraud requires the USA to move away from choosing not to have a memory and investigating and prosecuting the REAL criminals of the Capital Class, not the MAdoffs bones we are thrown leading us to believe that there is accountability, but prosecutions from real criminals of the Capital Class that turn our attention forward and away from the past. Our Nations selective memory is a crime.
Posted by: mad | January 8, 2010, 7:25 pm 7:25 pm
Nothing bur a bunch of crocks that get bail out by the tax payers because of political donations . We the tax payers didn’t vote for but we get the bill and the shaft. The founding fathers of this country would be rolling over in thier gaves if the knew what has been going on in Washington D. C. This is not what our founding fathers want this country to be like. A goverment for the people by the people. Register to VOTE & VOTE .
Posted by: James Paul Cleveland | January 8, 2010, 11:17 pm 11:17 pm
It is surprising, to me, that some of you posters are still caught up in the illusion that there is a difference between the political parties. ‘Oh this happened on Bush’s watch’. Both parties are the corporate party and let us not forget how significantly Wall Street has bank-rolled Obama. Let us not forget that his monetary policy is a continuation of Bush’s.
Posted by: Nick | January 22, 2010, 5:53 pm 5:53 pm