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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: Brumar89 who wrote (77032)	1/26/2010 11:27:07 AM
From: Sully-	1 Recommendation Read Replies (1) \| Respond to of 90947

Bailout Watchdog Investigating Fed's AIG Secrecy AP WASHINGTON -- An independent investigator is launching two probes into the government's rescue of American International Group Inc. and the insurer's subsequent payments of billions to big banks. Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says the Fed withheld documents he requested when auditing AIG's "backdoor bailouts" of banks it did business with, including Goldman Sachs Group Inc. Barofsky's allegations came in prepared testimony provided to members of the House Committee on Oversight and Government Reform and obtained by The Associated Press. The Federal Reserve Bank of New York produced 250,000 pages of documents after committee Chairman Edolphus Towns, D-N.Y., issued a subpoena earlier this month. Barofsky says in the testimony prepared ahead of his scheduled appearance before the committee on Wednesday that "issues have come to light that call into question whether the government has been and is being as transparent as possible with the American people." He blasts Treasury for issuing misleading public statements and outlines new investigations into the Federal Reserve and the New York Fed. Because of Towns' subpoena, "documents have come to light that were not provided to the (watchdog) audit team during the course of the audit," Barofsky says, leading him to "review the extent of the Federal Reserve's cooperation." The committee is investigating why the New York Fed, then led by Treasury Secretary Timothy Geithner, agreed to pay banks billions to cancel their contracts with AIG, which is based in New York. Geithner approved the deals, which may have cost taxpayers billions more than necessary because he did not demand concessions from banks AIG did business with, according to Barofsky's earlier audit. Barofsky, Geithner and New York Fed General Counsel Thomas Baxter will appear at a committee hearing Wednesday to answer questions about the deals. Former Treasury Secretary Henry Paulson also has been invited to appear. "If anyone at the Fed thought that this investigation will stop after Wednesday's hearing -- they are completely mistaken," said California Republican Darrell Issa, the committee's top Republican. "There has been a widespread effort by officials at the New York Fed to thwart transparency, and we will continue to pursue this investigation for as long as it takes to get the truth." Barofsky's second investigation is into e-mails from New York Fed lawyers instructing AIG to withhold some details of the deal from a disclosure filed with the Securities and Exchange Commission. Lawmakers have chastised the Fed for refusing to say which banks benefited from the AIG bailout, and by how much. A series of e-mails released under the subpoena show New York Fed officials and lawyers arguing for AIG to reveal less information than it wanted about those deals and other matters. "The New York Fed has fully cooperated with (Barofsky) and will continue to do so," a spokesman said in a statement. Fed officials have said many of the e-mails in question were taken out of context. In his testimony, Barofsky rips into Treasury for public statements that he says misled the public about the AIG bailout. He cites a statement e-mailed by a Treasury representative that says "taxpayers will be made whole" on the part of the AIG transaction that has attracted the most scrutiny. "Narrowly mentioning that taxpayers will be 'made whole' ... without mentioning the huge losses Treasury expects to suffer on other, inextricably linked parts of the very same transactions, is simply unacceptable; the American people deserve better," Barofsky says. The news comes as the White House beats back a populist uprising against the reappointment of Fed Chairman Ben Bernanke, who was a key architect of the bailout. Bernanke has called for a Government Accountability Office audit of the AIG deals. Senators also are negotiating a deal to overhaul the financial system. They are considering stripping the Fed of some of its bank supervision powers. The House already passed a bill subjecting the Fed to unprecedented transparency. foxnews.com

To: Brumar89 who wrote (77032)	1/27/2010 3:00:34 PM
From: Sully-	1 Recommendation Read Replies (1) \| Respond to of 90947

Culture of Corruption Watch: Grilling Geithner By Michelle Malkin on Tim Geithner 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. >>> michellemalkin.com