A lawyer for the New York Federal Reserve Bank is out with a statement claiming that Timothy Geithner played no role in the incident where lawyers instructed AIG to hide key elements of their payments to counter-parties.
The New York Federal Reserve Bank did not bring securities law disclosures for insurer American International Group Inc. to the attention of Timothy Geithner, who headed the bank at the time of AIG’s bailout in 2008, the bank’s top lawyer said on Friday.
“Matters of AIG securities law disclosure were not brought to the attention of the president of the Federal Reserve Bank of New York,” Thomas Baxter, the New York Fed’s general counsel, said in a statement.
This has basically become the party line, now. The NY Fed is saying what the Treasury Department and White House spokesman Robert Gibbs has said on the subject. But this betrays the simple fact that Geithner was the head of the NY Fed at the time, and any malfeasance – perhaps illegal malfeasance – happening on his watch should reflect on him. David Sirota explains:
Notice that the White House is not denying that illegal action may have occurred – the administration is only making the (preposterous) assertion that the regulatory filings of the largest corporation in the New York Fed’s receivership somehow “didn’t rise” to Geithner’s level. That’s right, we’re expected to believe the decisions to authorize and then hide multi-billion-dollar taxpayer-financed sweetheart deals for Geithner’s friends at Goldman Sachs and all the other big banks obviously – obviously! – “didn’t rise” to Geithner’s level. Hmm…where have we heard this “no controlling legal authority” argument before…hmm…oh, right – from top Enron executives. And I thought the President was telling us that he believed in “buck stops here” accountability for those at the top, right? Guess not.
Sirota also notes the difference between this scandal – where Geithner is presumed innocent – and the incident with Van Jones signing a letter forced an immediate response of Jones being let go. “Tim Geithner heads an institution that helps Goldman Sachs steal $12 billion through AIG and then helps AIG hide that fact – not only does he not get fired from his job as the top financial regulator in America, he gets the full confidence of the President of the United States,” Sirota said.
On last night’s Ed Schultz Show, Eliot Spitzer, one of three former regulators who penned the op-ed calling for the release of all of AIG’s emails, continued that call today, saying that we will never know both Geithner’s role and the final reckoning on AIG’s place in the financial meltdown without them.
Spitzer expressed surprise that the White House would make “such definitive statements about Geithner’s involvement or lack of involvement,” when there could be smoking gun evidence still lurking out there. He emphasized that the taxpayers own AIG, and “it is our right to understand what is being done with our money.” He again called on Congress to subpoena AIG for the emails, to understand the NY Fed’s role and the underlying structure of what has been described as a “backdoor bailout.”
“We call it an open source investigation […] There’s no reason to protect AIG. Our tax dollars bailed out Goldman Sachs, bailed out the other banks. We need to know, when did the counter-parties know that there was insufficient collateral at AIG? What did they do about it? What did AIG do when they realized this? We need to track the information,” said Spitzer.
Geithner has yet to respond as to whether he will testify in front of the House Oversight Committee on this issue.