Flashback: America slides deeper into depression as Wall Street revels | US Bankers Get $4 Trillion Gift From Barney Frank | Financial reform bill passes U.S. House | Taibbi: Obama’s sellout to Wall Street creates ‘permanent bailout’ | Fed Sicks Attack Dogs On Ron Paul After Audit Amendment Passes | How Goldman secretly bet on the U.S. housing crash | Bernanke continues pressing for sweeping new powers for Fed | Federal Reserve Appeals Order to Disclose Emergency Bank Loans | Judge Orders Federal Reserve To Disclose Who Received Bailout Trillions | Geithner lambastes US economic watchdogs resistant to planned transfer of powers to Federal Reserve | Former NY governor Spitzer: Federal Reserve is ‘a Ponzi scheme, an inside job’ | Hands off the Fed, Bernanke warns Congress | US Senate Blocks Bill To Audit The Fed As Government Prepares For Second Round Of Looting | Taibbi: NYSE ends transparency to protect Goldman Sachs | Goldman Sachs: The Great American Bubble Machine | Obama Regulatory Reform Plan Officially Establishes Banking Dictatorship In United States | Obama unveils overhaul of financial system oversight | 10 U.S. banks to repay U.S. bailout money | Federal Reserve To Be Given Sweeping New Powers | HR 1207: Battle To Audit The Fed Has Only Just Begun | Top Senate Democrat: bankers “own” the U.S. Congress | Barclays, Lloyd’s, RBS join Goldman-Sachs in the black | Goldman-Sachs to repay TARP loan, resume private operations, bonuses, at “earliest time” possible | Wall Street’s Big Takeover | Behind the panic: Financial warfare over the future of global bank power | Private Federal Reserve Makes Power Grab as Bush, McCain Urge Congress to Approve Plan | Goldman-Sachs Alumni Hold Reins of Financial System | Treasury’s Plan Would Give Fed Wide New Power | Financial ’super cop’ role for Fed
Geithner’s Record: G20 agrees to continue economic stimulus measures; Geithner shops international reserve accord | Timothy Geithner: travelling bond salesman | Chinese economists deem huge holding of US bonds “risky” as Geithner visits | Report from the 2009 Bilderberg Conference | Geithner To Take Orders From Global Elite At Bilderberg | US backing for world currency stuns markets | Geithner wants a bigger stick | Geithner Plan Will Rob US Taxpayers: Stiglitz | Global recession deepening, Geithner says | Geithner Said to Have Prevailed on the Bailout | U.S. Senate confirms Geithner as treasury secretary despite reservations | US Treasury Secretary pick says he regrets not paying taxes | Bilderberg Seeks Bank Centralization Agenda
Steve Watson, PrisonPlanet.com
January 11, 2010
Explosive emails released last week could see Treasury secretary Timothy Geithner become embroiled in criminal charges for his role in a cover up that exposes the monumental criminality behind the $182.3 billion bailout of American International Group Inc.
In November and December 2008, The Federal Reserve Bank of New York instructed the bailed out AIG to hide from the public details regarding payments the insurance giant made to banks, including Goldman Sachs Group Inc. and Societe Generale SA.
Using Fed secured taxpayer bailout money, AIG paid several banks 100 percent of the face value of credit-default swaps, as other financial institutions were negotiating deep discounts for the unregulated paper assets that do not have to be backed by cash.
The decision to pay the banks in full may have cost AIG, and therefore taxpayers, at least $13 billion over the odds.
The “backdoor bailout” of the banks, as it has been dubbed was exposed in March 2009 after the SEC challenged AIG’s filing, however, e-mails obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee, have re ignited the situation as they conclusively expose a collusion between AIG and the Fed to deceive the public.
The e-mails between company and regulator, released last Thursday, show that The New York Fed crossed out reference to the payments and that AIG also omitted the details when the Securities and Exchange Commission filing was made public on Dec. 24, 2008.
The emails, the content of which are highlighted in this Bloomberg News article, also show that the Fed wanted numerous other details about the AIG bailout withheld or delayed from public oversight.
“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”
Despite denials from the Treasury and the New York Fed that Geithner was involved in the scandal, as the President of the New York Fed at the time, his head now rests firmly on the chopping block where he awaits his fate.
Issa is seeking more information from the New York Fed on the matter, following the statements of general counsel Thomas Baxter, who declared in a letter in defense of Geithner Friday “In my judgment, as the New York Fed’s chief legal officer, disclosure matters of this nature did not warrant the attention of the president.”
“It’s a staggering admission by Mr. Baxter that he felt strong enough that Secretary Geithner wanted him to limit AIG’s disclosures on counterparty payments to the SEC that he says he didn’t even feel a need to bring the details to his boss’ attention,” Issa said in a statement. “This letter raises more questions on the inner-workings of the New York Fed during one of the most pivotal periods in our nation’s history.”
Geithner’s extensive connections to Goldman Sachs also raise serious questions, given that the investment bank directly profited from the AIG payments.
Geithner’s predecessor and Treasury Secretary at the time all of this unfolded, Hank Paulson, also once served as Chairman and Chief Executive Officer for Goldman Sachs, after working for the firm for decades.
Paulson rammed through the bailout of AIG with threats of financial armageddon and physical martial law, claiming he “felt the pain of AIG”, comments for which he was slammed by Republican Congressman Cliff Stearns earlier this year.
AIG’s outstanding debts to Goldman Sachs meant that $13 billion of the money handed over to AIG by Paulson went directly to Goldman Sachs.
Meanwhile, Bear Stearns and Lehman Brothers – both investment banks in direct competition with Goldman Sachs – were not bailed out when bad debt forced them to cease operating under the same circumstances as AIG. [Ed. Note: See the NYT article, What Really Killed Bear Stearns?]
Congressman Stearns pressed Paulson on his conflicts of interest, stating, “Isn’t there some point where you say hey, I’ve got a conflict of interest here, you don’t feel any kind of scintilla of ethics on this thing at all?” Paulson responded by claiming that he got a waiver from the ethics agreement.
Paulson’s appointment, at the height of the financial crisis, of ex-Goldman Sachs executive Neel Kashkari to oversee the distribution of bailout monies also highlights the vast conflict of interest surrounding this scandal.
As the New York Times reported earlier this year, Goldman Sachs effectively bailed itself out. Since that time the bank has been making record profits on trading and now completely dominates the program trading market.
This blatantly criminal activity has led to Goldman being labeled “Financial Terrorists” by analysts. Even Rolling Stone magazine has exposed Goldman Sachs’ persistent role in steering and manipulating the economy over the last century.
At the time of the bailout we warned that the so called financial saviours represented nothing more than the old guard of the corporate elite, the very people responsible for the financial crisis in the first instance.
Judge Andrew Napolitano, appearing on Shepard Smith’s Fox News show last week, stated that he believes Geithner could face a criminal probe:
Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said the e-mail exchanges were “troubling” and that he plans to hold congressional hearings on the matter.
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