graphic: twolf1

graphic: twolf1

This is a timeline based on the emails released by Federal Reserve Bank in response to a letter request from Rep. Darrell Issa. There are many gaps which you can tell from both the Bates Numbers and because many of the email strings say 1 of X pages, etc., you can tell that some pages are missing out of the string. You can find the entire set of emails over at The New York Times.

11/21/08             Kathy Shannon of AIG sends a list of “trigger events” and proposed 8-K filings to the NY Fed and asks for input as to whether AIG has inadvertently have omitted anything (Bates #AIGHOGRM1725-1727).

11/24/08            4:16 p.m. Brett Phillips, Counsel to NY Fed sends follow up email saying “We just want to make sure that the Fed’s information roll out is timed consistently with the company’s plans.”  Phillips also asks for a conference call later that same day. (Bates # AIGHOGRM 1724-1725).

11/24/08-            9:44 p.m. Brett Phillips emails after the conference call. “With respect to the press release and 8K rollout that we discussed earlier this evening. I just wanted to recap for the larger group and ask about one possible modification t the approach we discussed.” And goes on to suggest altering breaking the 8K scheduled to be filed before 10 AM the next morning into two separate filings, one about TARP and one about Maiden Lane III,  and manipulating the timing of the filings of the two 8Ks. (Bates# AIGHOGRM1833)

11/24/08             11:35p.m. Kathy Shannon tries to stick to AIG’s original filing plan. “We thought that given the significance of the transaction, AIG would be best served by filing tomorrow if the 8_k (sic) were ready.” She suggests another conference call in the morning. (Bates# AIGHOGRM1832)

11/25/08              10:12 A.M. Diego Rotsztain, an associate at Davis Polk & Wardell, NY Fed’s outside law firm, sends email to AIG’s Kathy Shannon asking her to call him ASAP to discuss the 8-K Process. (Bates# AIGHOGRM1831)

11/25/08              8:43 p.m. Peter Bazos, a partner at Davis Polk, emails Kathy Shannon and others with comments to the Maiden Lane III form 8-K. [CAK notes- I guess this means that AIG acquiesced to NY Fed’s desire to split the filing into two filings] and included the admonitions “we understand that the ML III 8-K will not be filed tonight.” [emphasis in original]. (Bates# AIGHOGRM1829-1830)

11/25/08              10:21 p.m. Kathy Shannon again tries to hew to AIG’s obligations to disclose. “With respect to your specific comments, while we agree as a technical matter that the agreements listed in the index do not need to be filed with the 8-K and could be delayed to the Form 10-K, we and [AIG’s outside counsel] Sullivan & Cromwell that the better practice and better disclosure in this complex area is to file the agreements currently rather than to delay. I also believe that given the extensive comments that we have received from the Staff [of the SEC] with respect to this area, that the Staff  would not be particularly happy with a decision to withhold documents at this time.” (Bates# AIGHOGRM1828-1829)

11/30/08              10:41 p.m. Kathy Shannon confirms to Peter Bazos that AIG intends to file the ML III form 8-K at the close of the market on Monday 11/31/08. The deadline for filing is 12/1/08. (Bates# AIGHOGRM1827)

12/01/08              1:56 p.m. Peter Bazos emails his comments to AIG’s proposed 8-K filing. (Bates# AIGHOGRM1826)

12/01/08              5:10 p.m. Kathy Shannon emails back that she is in the process of incorporation the Fed’s changes. However, AIG still does not like the changes proposed by David Polk. (Bates# AIGHOGRM1825-1826)

12/02/08              11.10 A.M. Kathy Shannon emails to report that all of the Fed’s proposed changes have been made. These changes are doozies. There are changes to the Shortfall Agreement, changes that strip out all mention of “synthetics” [presumably meaning synthetic credit default obligations] (Bates# AIGHOGRM1825)

12/21/08              Kathy Shannon sent draft of form of an updated 8-K relating to Maiden Lane III to Fed’s lawyers so that Fed can issue a press release. This form updates the ML III filed on December 2. (Bates# AIGHOGRM 1532)

12/22/08              Kathy Shannon sends a follow up email about filing the form8-K update. Lack of response from Fed has delayed the filing. AIG would like to finalize and release before the market opens on 12/23. (Bates # AIGHOGRM 1531)

12/23/08              9:02 a.m.  A Law Clerk at Davis Polk emails a markup of AIG’s draft 8-K filing. (Bates # AIGHOGRM 1539-2540)That’s it up at the top of this post. Take a look for yourself, and see how much information they strip out of it. (Bates # AIGHOGRM1535-1536)

12/23/09              2:00 p.m. Kathy Shannon once again says that she, and outside counsel Sullivan & Cromwell wants to include more information than Davis Polk and NY Fed . (Bates # AIGHOGRM 1539)

12/30/08              11:10 a.m.  The SEC faxed over a letter addressed to Ed Liddy, Chairman and CEO of AIG, informing AIG that the form 8-K filed on 12/24/08 was inadequate and requesting that AIG revise its disclosure. (Bates# AIGHOGRM1639-1640) Specifically, the SEC notes that the filing did not have a schedule of derivatives ( the “synthetics” mentioned on 12/2/08 above?) and was missing a copy of  the agreements stripped out  in November (see entry for 11/24/08 at 10:21 PM above). It looks like Shannon and Sullivan& Cromwell were right about how the SEC Staff would react and NY Fed and its lawyers were, erm, not so right.

12/30/08              3:32 p.m. (The printing is faint and it is hard to read the time stamp.) Kathy Shannon sends out an email to (not sure if it’s just AIG internal or if it includes Sullivan & Cromwell people as well) attaching the letter from the SEC and asking them to begin drafting a rebuttal with arguments about why AIG did not have to disclose this stuff. (Bates# AIGHOGRM1641)

—There is a two week gap in the documents produced—

1/13/09                9:32 p.m. Peter Bazos from Davis Polk emails his comments to the revisions to the defective 8-K. His comments are that the information should still be omitted; including column headings, except now there should be a notation informing the reader that the information is being omitted. The reason for the redactions is “Portions of the exhibit have been omitted pursuant to a request for confidential treatment.” (Bates# AIGHOGRM1165)

1/14/09                Anthony Greco of Sullivan & Cromwell emails Peter Bazos of Davis Polk and says though AIG’s team with defer to the NY Fed’s team, he would like to know the basis for the headings being confidential. (Bates# AIGHOGRM1165)

3/12/09                From Kathy Shannon” In order to make only the disclosure that the Fed wants us to make, which we understand to be not to include the CUSIPS or Tranche names and give the amounts by counterparty on a total rather than a transaction by transaction basis, 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. If we are still planning to file tomorrow afternoon, we will need to do as much as possible tomorrow morning to assure ourselves that we can make that representation.” She asks the staff to get cracking on researching that. (Bates# AIGHOGRN 0274)

3/13/09                12:21 p.m. Alejandro la Torre of the NY Fed emails Sarah Dahlgren Senior VP of the NY Fed to advise that the NY Fed wants to meet with the SEC and AIG at 2 PM and that AIG is still “deliberating on the proposal surrounding the disclosure”. LaTorre stresses that it is important to reach consensus before then. I read it as la Torre wanting Dahlgren to put pressure on AIG. (Bates# AIGHOGRM0268-0268)

3/13/09                12:33 p.m. Dahlgren returns LaTorre’s email and carbon copies to Kathy Shannon and others alerting then to 2 PM deadline and asking if there is anything NY Fed can do (to hurry them up?) (Bates# AIGHOGRM0267-0268)

3/13/09                12:37 p.m.  “AIG is still confirming their comfort level with certain of the redactions we’d like made on the 8-K schedule.” (Bates# AIGHOGRM0267)

3/13/09                12:52 p.m. Kathy Shannon replies that AIG is OK with most of the redactions but one of the schedules must have a heading indicating that the redacted column is a ”List of Derivative Transactions.” (Bates# AIGHOGRM0266) I guess NY Fed s still trying to hide the synthetics and AIG was still trying to disclose them.

CAK notes:  The story these emails tell is of AIG trying to do plain vanilla disclosures, and initially involving the Fed to make sure they were disclosing enough. The Fed, however, seems to grab that opportunity to insert itself, repeatedly, in trying to have AIG not disclose in the normal way. The non-disclosures are so blatant that the SEC complains. The Fed keeps pushing AIG not to disclose and AIG keeps trying to thread the needle. I can sort of understand IAG trying not to antagonize the Fed, after all the Fed now owed 80% of AIG. What seems strikingly out of place was the Fed not wanting AIG to be a model corporate citizen and fulfill its reporting obligations.

Elliot Spitzer is correct, the emails released thus far are sufficiently damning and raise a host of suspicions, and we have a right to know the full story. Further, because of the push back and forth, it is hardly wild speculation to think there is a smoking gun document out here.

I see the absence of Geithner’s name on these emails a bit differently than the Fed spokes person did. He is conspicuous by his absence.

Why wasn’t Geithner copied—at least publicly, who knows how their archive system treats “bcc”?—on these emails? Did he have something more important going on just then? Like what? His dog needed a manicure?

His absence from this process suggests either that he knew it was a naughty thing to do and didn’t want to get caught doing it, or he was completely derelict I his duties. It was his forking JOB to know when things like this were going in his shop.