Geithner and the AIG Emails: Scandal Is Only Tip of the Iceberg

[marmar]

via AlterNet:



Geithner and the AIG Emails: Scandal Is Only Tip of the Iceberg

By Eliot Spitzer and William K. Black and Frank Partnoy, NewDeal 2.0. Posted January 7, 2010.

Now we learn that Geithner told AIG to withhold details from the public about the billions it handed to banks during the crisis.



In a December New York Times op-ed, we called for the full public release of AIG email messages, internal accounting documents and financial models generated in the last decade. This Thursday, a Bloomberg story revealed that under Timothy Geithner's leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The emails requested by Issa span five months beginning in November 2008. If five months of emails reveal information key to our understanding of the aftermath of the crisis, imagine what 10 years of emails could contribute to our understanding of its causes. We believe the AIG emails and other internal company documents are the 'black box' of the financial crisis. If we understand the failure of AIG, we will more fully understand the crisis -- what caused it and more importantly how to prevent it from happening again.

The emails today detail the efforts of the Fed to suppress the disclosure of payments made to banks such as Goldman, Sachs Group for reimbursement of their credit-default swap exposure. When the Treasury Department stepped in, AIG had at least $440 billion in credit-default swaps outstanding. The Fed, led by Tim Geithner, paid Goldman, Sachs Group and other banks 100 cents on the dollar for these instruments rather than negotiating a lower rate closer to the actual value, (estimated by some to have been as little as 20 cents). In testimony to the Congressional Oversight Panel, Tim Geithner insisted it was necessary to make these payments in full, arguing that even a small downward negotiation would prove catastrophic to the financial sector. Elizabeth Warren, head of the oversight panel has repeatedly challenged repeatedly this assertion.

Regardless the size of the payments, the Fed's request to suppress both their amount and the parties to whole these payments were made would not have come to light without the release of these emails. Without the rest of the emails, we will be unlikely to fully understand what led to the collapse of AIG and the financial markets. If we can't understand it, we will be unable to prevent it from happening again.

As such, today we are renewing our request for the full public disclosure of all AIG documents. We believe the government should put these documents on-line, thereby establishing an open-source investigation that would allow journalists and citizens the opportunity to piece together the story of what happened at AIG and in so doing more fully understand what happened in the broader financial collapse. AIG -- and more specifically its credit-default swaps exposure -- was an important contributing factor to the crash of the financial markets. What sets this company apart from others that played a role in the crisis is that we, the taxpayers, own it. As we noted in our original piece, US taxpayers bought 80% of AIG when they bailed the company out with $180 billion last year. As owners of the company, taxpayers are also owners of AIG. As owners of the company we can demand the release of these documents. ............(more)

The complete piece is at: http://www.alternet.org/politics/145020/geithner_and_the_aig_emails%3A_scandal_is_only_tip_of_the_iceberg

[Doctor_J]

1. Isn't Issa himself a criminal?

Why are felons allowed to pass laws?

That said, Geitner should be fired today and replaced by Elizabeth Warren.

[Bluenorthwest]

2. Issa is not a felon. No convictions of any kind.

Although he has one of the more vivid early arrest records in Congress, lots of auto theft, he was never convicted of anything. He is an awful but elected and legally sitting member of the House. I offer that each day, our system convicts criminals on the testimony of other criminals, with long records of actual convictions. Considering that, I suppose Issa qualifies to speak. He's a right winger that I do not like, but it can take a crook to catch one, no? And it is really not cool to claim people are felons when they are not. No matter who they are. Bearing false witness is just uncool. Insinuations and implications are as vile as theft itself, it is a form of theft. Sorry to be so harsh but Tim is a crook. A crook. Fired is not enough. Obama fires people for being gay. I think this calls for the full force of the law, for once.
Warren would be great, but I do not think she'd take it.

[marmar]

3. "Obama fires people for being gay"

To whom are you referring? What did I miss?

[Bluenorthwest]

7. Average of two a day

from our military volunteers.

[Doctor_J]

4. Well, if you are going to defend Issa so vehemently, and

scold me for "bearing false witness" (though I put my false witness in the form of a question), then you should probably not call Tim a crook, since he too has no convictions of any kind (and in fact does not have Issa's "vivid arrest record").

[Bluenorthwest]

5. Words mean things

I'm not defending Issa, but of course you take that tack. I have campaigned live against Darryl, have you? He sees my face and scowls. But he's not a felon. I wish he were, he'd have lost. But he won.
So your deal here is that stating that he's not a felon, a fact I know from campaining against him is a defense of him?
You do understand that you asked a question, don't you? I answered your question. We don't let felons make law. Issa is not a felon. You asked, I answered. How the fuck is that a defense? If you do not want a factual answer, do not ask a question, make a statement. If you can not make a statement ask yourself why that is, you know?
You asked if he was a criminal. I told you the detailed facts. Pointed out that he was indicted for stealing cars. If that is your idea of defense, you need a dictionary.
Don't want facts don't ask questions.
I thought your questions were sincere.
You asked. I answered. Don't like Issa at all, he is a Republican and a bad one at that. Enemy of my household and family. Got it? I have many politicians I do not like, that does not mean I accuse them of being convicted felons when they are not. Issa is a crook. Does that make it better?

[Bluenorthwest]

6. Deleted a double post

[Dr.Phool]

8. Actually, some felons can make law.

I'm not aware of any at present, but in most states, after you are released from prison or parole, all of your rights are restored, except the right to possess a firearm. Those rights include the right to vote, serve on a jury, and hold public office...UNLESS the conviction had something to do with public corruption in office, and with that you only lose the right to hold office again.

I could give you the exact wording, but I'd have to dig up my old Ohio parole release certificate from 25 years ago.

[Bluenorthwest]

11. But of course, for that to matter, one must actually be a felon

And you are partly correct about that( more at the end of the post, I Googled it.) But that still does not make one who is not a felon into a felon. Hurling false accusations is what the right wing and the religious Democrats do to my family and community. I do not cotton to it. It is that simple.
When I read people posting questions, I feel compelled to answer with fact if I know the facts. I'm from Issa land originally, that is near his district with family in it.
It seems that the laws are different from State to State. Some States outright do not allow felons to hold office. Others have time requirements, others have types of convictions that are disallowed, and most tie the right to hold office to the right to vote, if you can vote, you can serve in office. I had no idea that there was so much difference. Not an area I think about much. In my state, you lose an office if convicted, but you can run for one after the time is served. Who knew? I didn't. So it seems that in CA, any old felon can hold office once the deal is done, but nevertheless that does not apply to the vile Issa, who is one of the most anti gay elected officials in this country, and who is from my home State, and because of those things, as a gay man, he is one of my greatest enemies, he is reviled and actively opposed by me, and by my family in general. He is also not a felon. He's a bigoted, hate based, venal and hypocritical Republican, and those things are far, far worse. Some of my best friends are felons. Make that former felons, but hey, I was in showbiz, former felons are part of our talent pool. Much like the Congress I guess.

[bertman]

9. What difference does it make who made the discovery and what his/her motivation is?

If this is true, it is further confirmation that the Wall Street Cartel has been using its insiders like Geithner to steal the U.S. taxpayers blind, in the name of saving the economy. These "institutions" are not there to protect the average citizen. They were devised and put into place by the the financial elites to protect THEIR interests, not ours.

As if we needed further proof of the collusion, but I agree that we should be seeing every email for the last ten years.

[Dr.Phool]

10. I want to puke every time I see Issa's slimey face. However.....

There's a post over in todays LBN Stock Market Watch thread that has Geithners own handwriting on the documents, with instructions to hide it, and don't talk about it.

I want to see him explain that under oath.

[ArcticFox]

12. I played Monopoly the other day on Wii

I found it funny that the computer player would trade Park Place to me when I already had Boardwalk for my mortgaged Kentucky avenue, and even threw in some cash in the deal.

It's not so funny when it happens in real life. We are the computer player. Our algorithms are controlled by the real players:

"The taxpayer's stake in AIG is held by the A.I.G. Credit Facility Trust, whose three trustees are Jill M. Considine, a former chairman of the Depository Trust Company and a former director of the Federal Reserve Bank of New York; Chester B. Feldberg, a former New York Fed official who was chairman of Barclays Americas from 2000 to 2008; and Douglas L. Foshee, chief executive of the El Paso Corporation and chairman of the Houston branch of the Federal Reserve Bank of Dallas."

The big boys can now trade their shit for AIG's assets free and clear.

Oh, and the computer player lost.

[Vidar]

13. K&R.

[McCamy Taylor]

14. I believe AIG paid out to Carlyle...and that Bush and Co. made sure that it would happen.

Thank you, Gov. Spitzer.