The chairman of the House oversight committee has questions about the $182 billion in bailouts given to American International Group and he’s ready to call in the U.S. Treasury secretary to get some answers.
At least one television host is suggesting the New York Federal Reserve’s involvement in the bailout could spell the “end” of Sec. Timothy Geithner.
Rep. Edolphus Towns (D-NY) said he plans to hold a hearing on the AIG bailouts sometime in January and plans to ask Geithner to testify about why the New York Federal Reserve told AIG to hide massive payments to banks, according to a published report.
“More than one year after the first federal bailout of AIG, the American people continue to question where their tax dollars were really sent when the government rescued this company,” Towns said in a statement, The Washington Post reported. “I continue to believe that a comprehensive review of the rise and fall of AIG and the involvement of counterparties can provide a useful vehicle to understanding how inadequate regulations, cheap money, risky business deals, and in some instances, corruption led to the current economic crisis.”
In the aftermath of its near collapse, AIG was told by the New York Federal Reserve to keep off the books its planned over-payments to other banks that had agreed to purchase its toxic assets, most notably Goldman Sachs. The move was revealed in a series of e-mails unearthed by Congressional investigators working for the Troubled Asset Relief Program inspector general.
“After the firm was given a taxpayer-funded backstop, one of its most controversial acts was to repay banks at 100 cents on the dollar for what was by that point nearly worthless insurance the banks had bought from AIG, known as credit-default swaps,” The Huffington Post noted. “A brutal report issued in November by a government watchdog disclosed that AIG had actually been trying to negotiate better terms with the banks until – guess what? — the New York Fed stepped in. The report held Geithner personally responsible, and led to renewed questions about his fitness for the job.”
Those questions were echoed by MSNBC’s liberal host Ed Schultz, who wondered aloud on Thursday night whether the scandal would be “the end” of Geithner.
“If there’s anybody out there who’s still harboring any doubt that the fix is in, I mean that most of this government has become a government of the bankers, by the bankers and for the bankers, this story has got to put an end to that and it’s also got to put an end to Tim Geithner,” Huffington editor Roy Sekoff opined to Schultz.
White House Press Secretary Robert Gibbs defended the embattled Treasury secretary on Friday, telling reporters that Geithner had recused himself from the AIG negotiations and “wasn’t party to the decision” to have AIG hide its payments.
A lawyer for the New York Federal Reserve later claimed, according to Bloomberg, that Geithner was unaware of the negotiations’ details because it was thought to be an issue unworthy of the bank president’s attention.
Rep. Barney Frank (D-MA), who chairs the House Financial Services Committee, said Friday that he is “troubled” by reports of the NY Fed’s actions and plans to hold a hearing on the matter, according to Politico.
“The power of the Fed in forcing AIG to keep these details secret cannot be understated,” Huffington Post added. “As detailed in journalist Andrew Ross Sorkin’s recent book on the bailout, “Too Big To Fail”, AIG officials had been pleading with the New York Fed for assistance throughout the crucial first weeks of September 2008 before the firm was finally given a taxpayer-funded bailout. The firm’s pleadings were largely ignored by Geithner, who was preoccupied with Lehman Brothers and other Wall Street broker-dealers like Merrill Lynch, Morgan Stanley and Goldman Sachs. The firm owes the Fed its survival.”
“In the end, A.I.G. would pay Société Générale $16.5 billion, Goldman $14 billion in total, Deutsche $8.5 billion and Merrill $6.2 billion,” The New York Times reported.
This video was broadcast by MSNBC on Jan. 8, 2010.
This story was updated from a prior version.
Trump: ‘Any Jewish people’ who vote for Democrats have ‘a total lack of knowledge or great disloyalty’
President Donald Trump on Tuesday accused the majority of Jewish American voters of having "a total lack of knowledge or great disloyalty" because they support Democrats.
While discussing Reps. Ilhan Omar (D-MN) and Rashida Tlaib (D-MI) during a talk with reporters, the president said he couldn't imagine any Jewish American voting for the Democrats due to the congresswomen's comments about Israel.
"I think any Jewish people that vote for a Democrat, I think it shows either a total lack of knowledge or great disloyalty," Trump said.
Conservative columnist blasts GOP as ‘partisan hacks for whom hypocrisy is second-nature’
On Tuesday, President Donald Trump once again ripped into The Squad, this time to undercut an emotional press conference in which Rep. Rashida Tlaib (D-MN) described the conditions her Palestinian relatives live under.
“Sorry, I don’t buy Rep. Tlaib’s tears. I have watched her violence, craziness and, most importantly, WORDS, for far too long,” the president tweeted. “Now tears? She hates Israel and all Jewish people. She is an anti-Semite. She and her 3 friends are the new face of the Democrat Party. Live with it!”
Sorry, I don’t buy Rep. Tlaib’s tears. I have watched her violence, craziness and, most importantly, WORDS, for far too long. Now tears? She hates Israel and all Jewish people. She is an anti-Semite. She and her 3 friends are the new face of the Democrat Party. Live with it!
Convicted Cardinal Pell’s fate hangs on appeal
An Australian court will rule on George Pell's appeal against child sex abuse charges Wednesday, when the convicted cardinal could walk free or begin a new round in his protracted legal fight.
Once the Vatican's third-ranking official, 78-year-old Pell was sentenced this year to six years in jail for sexually assaulting two 13-year-old choirboys at a Melbourne cathedral in the 1990s.
After more than two months of deliberations, a three-judge appeals panel will hand down their decision.
Pell is the most senior Catholic convicted of child sex abuse, making his case and Wednesday's ruling a touchstone moment for believers and victims groups around the world.