Su-prise! Both sides of the aisle are calling for Timothy Geithner's head!
AIG Hearings – A Preview
This morning at 10am ET, the House Oversight Committee will hold three separate panels on the AIG bailout. The first features Treasury Secretary Timothy Geithner, who chaired the New York Federal Reserve Board at the time, which was instrumental in managing the bailout. The second panel will feature former Treasury Secretary Hank Paulson, who was at Treasury at the time. And the third panel includes a number of interested parties, including Thomas C. Baxter, general counsel of the Federal Reserve Bank of New York; Stephen Friedman, the former chairman of the New York Fed; Neil Barofsky, the special Inspector General for the TARP; and Elias Habayeb, the former chief financial officer of A.I.G.
The hearing will look at the overall federal response to the AIG debacle, but at two specific circumstances in particular – 1) the decision to pay off the credit default swaps to AIG’s counter-parties “at par,” without forcing the banks involved to take a haircut; and 2) the effort by the NY Fed to hide disclosure of counter-party payment information to securities regulators, as revealed in recent emails. In addition to the Oversight Committee, Barofsky’s SIGTARP office is investigating the NY Fed anew over the disclosure issue (they first probed this issue in November).
Bipartisan Attack on Geithner
In a rare show of bipartisanship in Congress, both sides of the political aisle attacked Treasury Secretary Timothy F. Geithner over his role in the rescue of insurer American International Group.
As head of the New York Federal Reserve in the fall of 2008, Geithner signed off on making 100% AIG’s trades made by counterparties such as Goldman Sachs, Societe Generale and Calyon, even though another counterparty, UBS, had accepted a haircut.
The counterparties were made whole to the tune of $62.1 billion, trades that represented declining real-estate linked trades with AIG.
Democrat Stephen Lynch (D-Mass) said to Geithner of his actions, “You were not consistently on the side of the US taxpayer. You were supposed to protect the taxpayer..and you didn’t.”
When Geithner defended himself by repeating what he has said in the past, that AIG was at risk of default during the negotiations to get these reductions, Lynch dismissed his Armageddon-defense.
“There’s a big difference between giving them [the counterparties] 100 cents on the dollar and an AIG default,” he said.
Geithner could not answer why not making counterparties like Goldman Sachs’ 100% whole on its AIG trades posed systemic risk to the nation, and why he couldn’t force the French firms Calyon and Societe Generale to quit it with their demands that U.S. taxpayers cover their AIG bets 100%, despite the fact that UBS was willing to take a haircut.
He also couldn’t answer why the Fed had to give out any money at all since the triple-A rated U.S. was backing AIG’s balance sheet.
And Rep. John Mica (R-Fla) said Geithner offered “lame excuses on not paying taxes, and you’re offering lame excuses now,” adding, “why shouldn’t we ask for your resignation now” because “you have been incompetent on the job, and those are grounds for your removal.”
After Geithner was named a candidate for the Treasury post, disclosures soon arose about numerous instances of his failure to pay federal taxes.
Geithner questioned about former housekeeper, taxes
Members of the Senate Finance Committee met Tuesday with treasury secretary nominee Tim Geithner over concerns involving his personal taxes and the immigration status of a former housekeeper, transition officials said.
The Geithners employed a housekeeper whose employment authorization document expired about three months before she stopped working for them in October 2005, according to a written statement from the Senate Finance Committee.
Later, the housekeeper, who is married to a U.S. citizen, was granted a green card, transition officials said.
The second concern involves Geithner's taxes while he worked for the International Monetary Fund (IMF). According to a statement released by the committee, Geithner failed to pay self-employment taxes while the IMF paid him from 2001 to 2004.
Part 1: Glenn Beck on AIG Bonuses with Judge Napolitano
Culture of Corruption Watch: Grilling Geithner
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.)
Time To Indict Geithner For Securities Fraud
The web of known parties guilty of fraud, coercion, or securities manipulation keeps getting bigger. Please consider N.Y. Fed Told A.I.G. Not to Disclose Swap Details.
Starting in November 2008, the Federal Reserve Bank of New York under Timothy Geithner began urging American International Group, the huge insurer that the government had bailed out, to limit disclosure on payments made to banks at the height of the financial crisis, e-mail messages obtained by DealBook show.
The e-mail exchange between the bailed-out insurance giant and its regulator portray a strange reversal of roles, with A.I.G. staff arguing for the disclosure of certain details on payments for credit-default swaps to major banks, only to be discouraged by officials at, or representing, the Federal Reserve.
Geithner Allowed To Defend Himself
Please see the article for actual memos and other damning evidence.
I am 100% in favor of allowing Geithner to defend himself ... In a court of law, for securities fraud.
And as I have stated before Paulson, Bernanke, and Bank of America ex-CEO Lewis as well.
Part 2: Beck SLAMS Barney Frank, others for helping to cause the housing bubble
Geithner Resignation Calls May Increase as 2010 Election Nears
U.S. Treasury Secretary Timothy Geithner, as part of a grilling on Capitol Hill yesterday, was asked by a Republican lawmaker to resign. It is a call he is likely to hear again and again as next year’s election campaign heats up.
Earlier in the week, a Republican challenger for a U.S. Senate seat in Connecticut had demanded Geithner quit, lambasting him for being “cozy” with banks bailed out by the federal government. Two other Republicans have requested hearings into Geithner’s handling of the bailout of insurer American International Group Inc.
Geithner belongs in jail ... along with everyone else involved in this massive wealth distribution from American taxpayers to the banks.
