Secretary Timothy Geithner needs to start giving some answers. Will the Congress compel him to start answering questions? In recent weeks, Republican investigators on the House Oversight Committee unearthed troubling evidence that the Federal Reserve Bank of New York, while under the leadership of Secretary Geithner, pressured American International Group (AIG) to conceal critical information from the Securities and Exchange Commission (SEC) about billions of dollars in counterparty payments made with taxpayer money.
Inadvertent reporting errors are one thing. Directing a bailed-out company to withhold crucial information from a government agency in order to keep the American public in the dark is another. Whether or not the United States Treasury Secretary was directly implicated in the scheme is a key question. Either he didn't know and he was negligent or he did know and presided over a blatant attempt to withhold information from the American people.
In late 2008, while the U.S. taxpayers were on the hook for billions of dollars in cash infusions to float the toxic debt owed by AIG, Tim Geithner made the decision to cover AIG's credit default swaps at full value. Those payments -- made to counterparties like Goldman Sachs, Société Générale, and Deutsche Bank that had purchased AIG's credit default swaps -- were made at 100 cents on the dollar, instead of the reduced rate that AIG was actively negotiating with these firms.
The record of correspondence between representatives of the New York Fed and AIG now demonstrates that Geithner's team was concerned about the controversy that full disclosure of the payments would create. So the New York Fed instructed AIG to delete references to the counterparty payment rate from its SEC filing, thus obscuring the full measure of the bailout bonanza made possible by U.S. taxpayers. In a move that has become altogether too familiar, a government agency run by Tim Geithner decided to keep the whole truth from the American people. Someone needs to be held accountable.
When then President-elect Obama announced his decision to appoint Tim Geithner to run the United States Treasury, he noted that Geithner was "an honest broker" who had "earned the confidence and respect of business, financial and community leaders; members of Congress; and political leaders around the world."
At his confirmation hearing, Geithner was introduced to the Senate Finance Committee by Senator Chuck Schumer (D-NY) as the "very best" person to run Treasury and someone who "tried to raise awareness" and "call Congress' attention to the inadequate powers and authorities of the Treasury Department and the Federal Reserve."
I'm not sure what the President's definition of the word "honest" or Senator Schumer's understanding of the word "best" may be, but I sincerely doubt this is what the American people have in mind.
Secretary Geithner may have very reasonable and legitimate justifications for the role he's played in the bungled AIG matter, or the forced merger between Bank of America and Merrill Lynch, or the problematic bailouts of General Motors and Chrysler, or the chronic failures of the Treasury Department to deliver basic transparency to the American people. The problem is the rigorous oversight that was promised by this Administration and by the Democrats who control the Congress have failed to yield the opportunities needed to get to the truth.
Over the past twelve months, the House Oversight Committee has held hearings on the numerous flaws in the AIG Trust Agreement and the reports of the Special Inspector General of the Troubled Asset Relief Program (SIGTARP). The Committee has held five separate hearings and multiple panels of witnesses on Bank of America's acquisition of Merrill Lynch, yet Secretary Geithner has been noticeably absent from all of these proceedings. His absence, of course, is due to the fact that he's never been invited to testify.
After a year of hearings and investigations, it is time for the Oversight Committee to hold Secretary Geithner accountable for the decisions he has made that continue to affect entire sectors of the American economy and the lives of millions of Americans. The American people deserve answers, and they deserve them now. Secretary Geithner must appear before the Committee to give those answers.
Janet Tavakoli: Timothy Geithner, I Call Your Bluff
The general public has been kept unaware of several politically explosive facts. Given the extraordinary circumstances surrounding AIGs trades, the financial crisis, and bailouts, it's time to reopen this issue.
Huff TV: Roy Sekoff On AIG-Fed Emails: This Has Got To Be The End Of Tim Geithner (VIDEO)
HuffPost Editor Roy Sekoff appeared on The Ed Show Thursday to weigh in on news that Tim Geithner and the New York Fed actively worked...
Although I've been one of your harshest critics in the past, you are dead-on in this investigation and I urge you to keep digging and demanding accountability. This scandal goes much further than what you suggest here. Think: sovereign wealth funds, FNM, certain reviled "senior" sources in past administrations.
Thank you very much for your service to our Democracy.
Allena Hansen
Gosh, we sure could have used him during the 8 years of financial scandals that occurred during Bush's disastrous neglect of financial regulation, and the relentless lies that lead us into Iraq.
Oh, he's what, been in Congress since 2001, really? Oh, my bad
I would rather have a one term President than have you to Thank for his re-election. Mad, angry disappointed in his turn-coats supporters.
This all explains why the DEMS never even tried to be an opposition party when Bush was in power. Face it, we are all debt slaves to private interests in the GOP/DEM Plutocracy.
Nothing truly good will happen until we change the money game in Washington.
Firing Geithner will not make the economy recover faster. It will be years before any real recovery happens.
If you think voting for All Republicans will change the money game in Washington, I wish you luck.
You'll find that facts that surfaced today do not support the initial reporting and that those who gave it big play yesterday are doing their best to backpedal on it today.
There are a lot of red faces going around and you should be among those sporting one.
SHOULD be, I say.
Hook up with Barney Frank, and grill him.
The Repugs are going to spin this to the high heavens, despite having assisted the TARP holdup when Bush was President.
The shame of it is, where are the Dems on this? Still supporting Obama, apparently.
Why is this the President fault again.
What did the Republicans do to stop this outright assault on the middle- and working classes? Where were the Republican investigators during the eight years of Bush's disastrous leadership?
I don't disagree that Obama isn't doing this country (or himself) any favors by following the same neoliberal policies that took down the global economy; however, I think Issa is being a bit disingenuous to think that the American people really believe that he and his fellow Republicans care about anything other than their re-election efforts.
Americans do deserve some answers but holding Democrats to a different standard than Republicans is not the answer. Investigations by the House Oversight Committee must start with Paulson and include Geithner but anything else is just more political grandstanding and posturing.
Geithner needs to go but the fact remains that Issa could care less about how this impacts his constituents. Come November this isn't going to be about Democrats and Republicans but rather about ridding ourselves of incumbents who've been in office for far too long. Fresh faces and ideas are what this country needs, not more self-serving obstructionists.
Let's see you work on global warming. Let's see you work on holding torturers accountable.
I might even give kudos for your idea of letting everyone buy into the federal employee healthcare system if ALL employer groups could also join in the fun.
At any rate, Geithner does need to explain the advice he gave to AIG.
Fallbrook resident.
I think Geithner and Obama felt they couldn't let our primary banker, China, lose. AIG is China-based. It is a huge market-maker for Mortgage-Backed Securities (MBS) and Credit Default Swaps (CDS). I think Geithner had to guarantee 100% of these so the Chinese, our financiers, were kept 100% whole.
As a result, China has continued to buy Treasuries to support their currency peg (e.g. export markets) keeping the US$ artificially strong even as we print dollars like their is no tomorrow. So, for $175 Billion or so, we get to print a few trillion+ with little downside to the value of the US$.
This has allowed the FED to keep interest rates near 0%, funding a massive carry trade (borrowing $US at 0%, investing in safe foreign bonds at 3.5 to 6%). This plus trillions of off-balance sheet carry trade loans and hiding the toxic waste with the new mark-to-fantasy rules and presto - banks are paying back their loans to us and getting richer than ever. Same s%it, different day.
You seem to forget that under the current Unitary Executive system, the members of the Executive Branch have no obligaion to Congress, the courts or the people to explain themselves. They will not answer subpeopnas and they will not testify to any Congressional committie. No explainations will be given and 'Executive Priviledge' outweighs the publics right to know.
So please, Mr. Issa, get with the program. You simply can no longer demand or even request information from the Unitary Executive. President Obama, like President Bush, is above and beyond the law of the land as is anyone, ANYONE, the Unitary Executive so chooses.
Thank you,
The UnderClasses
"President Obama, like President Bush...."