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.
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.”
["AIG New York" photo by eflon; CC BY 2.0]
(2 votes, average: 5.00 out of 5)
Loading ...
Karl Marx would love the popular moves among politicians in various state governments and the federal government to ban so-called "junk" food in schools, and to "put healthy food in" convenience stores and on the tables of those they define as poor. It's a very elitist and arrogant mindset that promotes this ideology, and it needs to be addressed.
Ultimately, the war supporters in Congress prevailed in the vote on the resolution. Still, the vote was significant because it places every member of Congress on the record as supporting or not supporting the unconstitutional, costly, violent occupation of a country that never attacked us. This vote should serve as an important reminder to the American people of where their representatives really stand when it comes to policing the world, empire building, and war.
Except where otherwise noted, content on this site is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works license.
Video published by this site is licensed under a Creative Commons Sampling+ license.
Facebook
Digg
del.icio.us
reddit.com
Newsvine
Jeannon Kralj
Jan 08, 2010
Manna from heaven!
If alternaive media journalists and commentators, then they are not worth a darn. This should be the ticket to get rid of Geitner and his whole bunch of theives.
This article was nicely witten and explained clearly and up front the nature of this travesty.
Jeannon Kralj
Jan 08, 2010
Resubmission because of error in previdous submission.
Manna from heaven!
If alternaive media journalists and commentators don’t run with this, then I am going to lose trust in those who engage in silence on this. This should be the ticket to get rid of Geitner and his whole bunch of theives.
This article was nicely witten and explained clearly and up front the nature of this travesty.
woodbutcher
Jan 08, 2010
I thought we were going to audit the federal reserve. Hopefuly once the audit is completed we will have enough evidence and outrage to put these white collar gangsters out of buisness and in prison for many yrs to come we have been warned in the past about allowing private bankers to control the printing of our currency jefferson warned us about this lincoln knew this would be a disaster and wilson said it was the biggest regret of his life that he had sold out america to this group of criminals in suits. Thankfully we still have afew people like ron paul who have fought to bring these thievs to justice
whale-bone willy
Jan 08, 2010
we the people need to stop feeding the monster; stop paying taxes! file 9 exemption, and refuse to file income tax to the private corporation, the irs. we the people did not authorize the debts/loan; therefore, we the people should refuse to pay the debt.
milidudetoo
Jan 08, 2010
Its not about not paying your taxes, or voting in demos over repubs, they are aLL PART OF THE SAME CORRUPT CORE SYSTEM. the only way to get rid of cancer is to surgically remove it and then start living your life in a healthier way. we must remove the cancer which has metastasized thru-out our political system and then get back to a moral and ethical standard of living which would be acceptable in the eyes of the Creator. from abortions to homosexuality, these things must be stopped and the people repent of their actions before we can dare say/ask that God bless amerikkka
tommus
Jan 08, 2010
please don’t keep holding your breath waiting for anyone in power to do anything about this, except make it worse… ron paul is great but he’s only one guy and will remain a symbolic figure, unfortunately. start preparing yourself, in any small or big way you can, for life “off the credit/debt grid”
buy gold and silver bullion and stash it somewhere safe, NOT in a safe deposit box. consider joining an “open currency” network (www dot opencurrency dot com) start a garden and can the food. plant fruit trees. grow medicinal herbs. brew home-made colloidal silver antibiotic. hide income from the IRS if you can. if you can’t, think about ways to make self-employment income so you CAN hide it. develop local economic connections with your neighbors, like buying co-ops, child care co-ops, car pools, etc. barter for goods and services. how about starting a non-profit corp. with your friends or family and buying farm land, solar panels, etc? put your money in a local credit union, then get a microbusiness loan from the credit union. eat better and exercise more so you are healthier and need less “healthcare” learn a skill or three that you now pay someone else to do for you.
yeah, it all takes time and money. if you have an IRA or 401K and that is your only resource, cash some (or all) of it out, pay the penalty (they’re gonna get it sooner or later) and invest in YOURSELF.
above all, disabuse yourself of any notion that any elected official, media gate-keeper, or banking industry player is going to do anything for you except put another hand in your pocket… we are on our own. good luck and DON”T PANIC!
Jan 08, 2010
Geithner’s Fed told AIG to hide “backdoor bailout” | Republic Broadcasting Network
woodbutcher
Jan 08, 2010
I stopped paying taxes yrs ago out of frustration over the huge amnouts of money wasted on the war on drugs. And now it seems that we are finally making some ground in ending that fiasco and taking it out of law enforcements hands and giving responsabilty to those who are trained to deal with medical conditions mainly doctors . But we are gaining ground in other areas as well like the federal reserve ["I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. Thomas Jefferson] Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”
hugh m
Jan 08, 2010
If you think this is the only scam the goverment is running in town,read about the little known scam call cafri it,ll make this one look like childs play.
neo
Jan 08, 2010
Quis custodiet ipsos custodes
jo greg
Jan 08, 2010
Years ago, we realized the deck was stacked and the game was crooked. So do what people in the card game do when they realize the above… GET OUT OF THE GAME!
If all that bailout money had been given to the public with the stipulation that mortgages or other debt was paid off with that money, people would have stayed in their homes, the economy would flourish, and the banks would have gotten the money anyway. Now they get all the money and the houses. Grow a garden… etc.
recovering_KoolAid_drinker
Jan 08, 2010
I am not sure if I understand what exactly Geithner’s role personal was, but I on a different level, how wonder how many other back room deals were made with all the other companies getting Government bailouts that we don’t know about? As representatives of the US government, Geithner and others need to be held accountable for their behavior just as they held Martha Stewart accountable for hers.
The bailouts were just in-your-face theft, pure and simple.
FED to the Tax-payers, just bend over, grab your ankles…we are here to help you!
Jan 08, 2010
Links 8/1/2010: KDE Software Compilation 4.4 RC1 | Boycott Novell
Jan 09, 2010
revisiting mmpr / today « Within This Shell
DDearborn
Jan 09, 2010
Hmmm
So what we have is a group of economic terrorists at the FED who held America and indeed the world hostage. What is the “official” government answer to terrorist threats? Well golly gee whiz we strip them of their citizenship and send of to prison. I do believe that this action in conjunction with a bit of waterboarding of the heads of the FED banks and all the officers would allow the American people to get to the bottom of this ASAP. Oh….so sorry they are not Muslum! So I guess that option is off the table. Good grief, when is this going to end? I fear it will only end at the point of a gun.
Jan 10, 2010
Geithner’s Fed told AIG to hide “backdoor bailout”
Jan 10, 2010
Geithner’s Fed told AIG to hide “backdoor bailout” « RevolutionRadio.org
Jan 10, 2010
We Are Change Colorado Springs » Blog Archive » Geithner’s Fed told AIG to hide “backdoor bailout”
Jan 10, 2010
Geithner’s Fed told AIG to hide “backdoor bailout” « Truth11
Michael
Jan 10, 2010
This is just one of the area’s where there is corruption. All the bills being fast track through the Senate. Let’s have a real investigation of 911, and this other patsy the underwear bomber. The American people better wake up quick!
george
Jan 11, 2010
time to go to jail slim ball
Jan 11, 2010
Geithner’s Fed told AIG to hide “backdoor bailout” | We Are Change Utah
matt
Jan 11, 2010
once again non mainstream media doing and getting the job done.
Robert
Jan 11, 2010
And to think people were so Critical of Michael Moore’s movie, Capitalism. Seems Mike nailed it right on the head. This is just further evidence.
Jan 11, 2010
Geithner’s Fed told AIG to hide “backdoor bailout” | Homeland Stupidity « Qw Magazine's Blog
Suits
Jan 11, 2010
We will find out later about many back door and shady deals that are happening now and I hope someone will hold these people accountable. The sad joke is these days when a kid is asked what he wants to do when he grows up he says “I would like to create an entity that is too big to fail”. This is what suits the current environment.
Jan 11, 2010
Classic Criminal Behavior: Geithner’s Fed told AIG to hide “backdoor bailout” « Wars & Rumor
Jan 11, 2010
Why the Fed Likes Independence | Homeland Stupidity