Ed Towns, the chairman of the House Oversight and Government Reform Committee, just announced that he would hold hearings into the emails that show how the New York Federal Reserve delayed disclosure of AIG counter-party payments, hiding public information from federal regulators. The statement is below.

Towns wants to hold the hearing the week of January 18, and has invited Treasury Secretary Geithner to testify.

We’ll see if Geithner bothers to show up. Through spokesmen at Treasury, Geithner has maintained that at the time of the emails, he had recused himself from dealing with AIG issues (why was he still heading the NY Fed then, if he couldn’t work on one of their most important issues in their history?). The White House parroted this line today.

Democratic and Republican lawmakers have called on Geithner to testify on whether or not Federal Reserve officials improperly pressured AIG to not disclose how taxpayer bailout funds were used in 2008.

Asked if the Treasury secretary should comply, White House Press Secretary Robert Gibbs said “Secretary Geithner was not involved in these decisions.” [...] “These decisions did not raise to his level at the Fed,” he said. “There are not e-mails that involve Secretary Geithner in this instance.”

Eliot Spitzer, Bill Black and Frank Partnoy, who wrote an op-ed last month calling for the release of all the AIG emails, write today that this scandal is the tip of the iceberg.

The emails requested by Issa span five months beginning in November 2008. If five months of emails reveal information key to our understanding of the aftermath of the crisis, imagine what 10 years of emails could contribute to our understanding of its causes. We believe the AIG emails and other internal company documents are the ‘black box’ of the financial crisis. If we understand the failure of AIG, we will more fully understand the crisis — what caused it and more importantly how to prevent it from happening again [...]

The value of these documents, if it were ever in doubt, was certainly proved by Thursdays’s revelations.

Release the emails.

Here’s Rep. Towns’ statement:

Chairman Towns Announces Hearing to Examine New York Fed’s Role in Advising Public Disclosure of A.I.G. Counterparty Payments

WASHINGTON – Chairman Edolphus “Ed” Towns (D-NY) today announced that he will convene a hearing to examine financial disclosure advice the Federal Reserve Bank of New York’s (F.R.B.N.Y.) provided American International Group (A.I.G.) during the height of the financial crisis. In question are email exchanges that emerged this week between lawyers at F.R.B.N.Y. and A.I.G. which indicate that A.I.G. was advised to withhold key details from the public about the terms of the insurer’s federal bailout.

“More than one year after the first Federal bailout of A.I.G., the American people continue to question where their tax dollars were really sent when the government rescued this company. I continue to believe that a comprehensive review of the rise and fall of AIG, and the involvement of counterparties can provide a useful vehicle to understanding how inadequate regulations, cheap money, risky business deals, and in some instances, corruption led to the current economic crisis,” said Chairman Towns.

Chairman Towns intends to hold the hearing during the week of January 18, 2010. Witnesses invited to testify will include Treasury Secretary Timothy Geithner, who served as president of the Federal Reserve Bank of New York from 2003-2008, and Thomas Baxter, who has served as general counsel and executive vice president of the legal group at the Federal Reserve Bank of New York since 1995. Chairman Towns opened the committee’s investigation into the federal rescue of A.I.G. in early 2008.