Treasury Sec. Geithner's Opening Statement at AIG Hearing - Part 2
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http://firedoglake.com NEW YORK (CNNMoney.com) -- Treasury Secretary Timothy Geithner told lawmakers Wednesday that he had no involvement in an apparent attempt by government regulators to withhold crucial information about AIG's bailout from the public.
"I had no role in making decisions regarding what to disclose," Geithner testified at a hearing held by the House Oversight Committee Wednesday.
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AIG payouts: Who got what
Counterparties that got more than $1 billion from the government and AIG.
AIG counterparty Total payment
Societe Generale $16.5 billion
Goldman Sachs $14 billion
Deutsche Bank $8.5 billion
Merrill Lynch $6.2 billion
Calyon $4.3 billion
UBS $3.8 billion
Deutsche Zentral Genossenschaftsbank $1.8 billion
Barclays $1.5 billion
Bank of Montreal $1.4 billion
Royal Bank of Scotland $1.1 billion
Wachovia $1 billion
Source:Special Inspector General for the Troubled Asset Relief Program.
New York Fed officials instructed AIG (AIG, Fortune 500) not to disclose more than a dozen controversial transactions to the Securities and Exchange Commission in November 2008. At the time, Geithner was the president of the New York Fed, but he said he had recused himself from the day-to-day operations at that time because of his nomination to be Treasury secretary.
At least two lawmakers weren't buying Geithner's denial. "He has asserted complete ignorance of the Fed's efforts to cover up the bailout details," said Committee Ranking Member Darrell Issa, R-Calif. "Many Americans, including members of this Committee, have a hard time believing that Secretary Geithner entered an absolute cone of silence on the day that his nomination was announced."
Another Republican lawmaker, Rep. John Mica of Florida, also said he did not believe Geithner's testimony and called for his head.
"Why shouldn't we ask for your resignation?" Mica asked Geithner. "We're not getting the whole story, we're getting the blame story. You're either incompetent on the job or you knew what was taking place and you tried to conceal it, and I think that's grounds for your review."
Geithner angrily responded to Mica, "You don't know me very well." He then more calmly said, "That is your right to have that opinion. I have served my country as carefully and ably as I can."
AIG's bailout has incited furor among lawmakers and the public, as the troubled insurer has come to symbolize the corporate greed, risky behavior and lack of regulation that many believe caused the Great Recession.
The issue at hand on Wednesday was one of the bailout's most contentious: a decision by the New York Fed to pay counterparties 100 cents on the dollar for the underlying assets that AIG has insured through so-called credit default swap agreements. As a result, $62.1 billion of taxpayer and AIG funds were essentially funneled to 16 banks that were counterparties to AIG insurance contracts.
Committee Chairman Edolphus Towns, D-N.Y., called the facts of the case "murky."
"The circumstances surrounding the payments to the counterparties has created an air of suspicion and distrust among the American people, starting with the New York Fed's initial refusal to name the counterparties," Towns, D-N.Y., said at the hearing.
"The New York Fed argued that disclosing the counterparties would somehow injure AIG. In fact, when the information was finally released under pressure from Congress, nothing happened." Federal Reserve Chairman Ben Bernanke, who is not testifying Wednesday, said in a letter that he was also not involved in any decision regarding disclosures.
http://money.cnn.com/2010/01/27/news/companies/aig_hearing/index.htm?section=money_latest
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