Raw Story<\/strong>
By Daniel Tencer
January 7, 2010<\/div>\n
AIG has received $183 billion in taxpayer relief. The news that the New York Fed attempted to keep from the public how that money was spent will likely increase political opposition to Geithner’s appointment as Treasury Secretary. As Shahien Nasiripour <\/font><\/strong>notes at the Huffington Post<\/font><\/strong><\/a><\/u>, a <\/font><\/strong>report<\/font><\/strong><\/a><\/u> [PDF] last fall from the inspector general for the TARP bailout found that the New York Fed pressured AIG into paying creditors like Deutsche Bank, Goldman Sachs, Merrill Lynch and Wachovia 100 cents on the dollar for failed insurance agreements known as credit default swaps, even though AIG was actively negotiating with those banks to pay them less. If AIG had had its way, it would have saved taxpayers money. But the Fed’s intervention ensured taxpayers would be on the hook for all of AIG’s bad debts.<\/font><\/strong><\/p>\n People have been saying that the biggest decision of Obama’s first term would be about the troop levels in Afghanistan. I don’t think that’s right. I think it’s about his economic team, as he likes to refer to his advisers. It’s the most important one because it represents a mistake – Geithner was a bad choice from the start. He’s not in trouble because of Republican name-calling or divisive partisanship. He’s in trouble because he lacks talent, vision, and his priorities are way off the mark. <\/p>\n![](\"http:\/\/upload.wikimedia.org\/wikipedia\/commons\/thumb\/b\/bd\/Timothy_Geithner_official_portrait.jpg\/250px-Timothy_Geithner_official_portrait.jpg\")
The controversy surrounding Treasury Secretary Tim Geithner’s role in the 2008 Wall Street bailouts was ramped up Thursday with the revelation of emails that show the New York Federal Reserve – then run by Geithner – pressured insurance giant AIG to withhold information about payments the company made to its creditors. Rep. Darrell Issa [R-CA] obtained emails between AIG employees showing that the company had planned to disclose in its filings to the SEC that it had paid 100 cents on the dollar to creditors like Goldman Sachs and other banks, but "the New York Fed crossed out the reference," Bloomberg News reports<\/font><\/strong><\/a><\/strong><\/u>.<\/p>\n In a March 12, 2009, e-mail, Kathleen Shannon, an AIG in-house lawyer and senior vice president, told AIG executives that the firm needed to come up with a reason, per the New York Fed, for why it wasn’t going to publicly disclose details regarding payments to counterparties. "In order to make only the disclosure that the Fed wants us to make…we need to have a reasonable basis for believing and arguing to the SEC that the information we are seeking to protect is not already publicly available," Shannon wrote in an e-mail sent at 10:55 p.m. on March 12. <\/ul>\n<\/p><\/div>\n
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