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.



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Hmmm, so are they preparing to get a token Fall guy/gal here, but it still makes no sense unless that is the investigation is already so tainted. And the sigtarp report issued this last November already has Geithner fully aware heavily invovled, making him totally responsible for okaying the deal that would have AIG reimburse their counter-parties at 100% even though Aig had been in discussion for lower rates. Yet now, we’re supposed to believe he had nothing to do with this issue. Plus, how does Geithner explain this.
How, exactly, does the WH benefit from continuing to protect this guy? (This is not a rhetorical question.) It’s completely idiotic to think that Geithner didn’t know what was going on, but even if we were to accept the official posture on this, the whole sordid mess still gives off a powerful stench. So what’s next, the “executive privilege” bullshit line?
First of all they need to confirm what was done and is it illegal. It sure smells rotten. Then they have to go after who was responsible, give them a trial and jail time. That whole process will serve to temper possible other illegal stuff which was not prosecuted by Bush and now apparently Obama. If Geitner is not the one some one is. Get them
Build gallows in the early morning, trial at 10 oclock and a hanging at high noon.
The Obama administration circling the
wagonsdrain.Dulce et decorum est pro Goldman Sachs mori.
Will the buck never stop at Geithner? I am imagining “Deer in the Head Lights” Geithner in prison. Pure fantasy.
‘Presumed innocent’, eh? Yeah, butter wouldn’t melt in Geithner‘s mouth – the problem being that the binary here is either A) he knows all about the matter because its in line with his interests and agenda to do so, being the director of it all or B) he’s an easily gulled incompetent who rode a Peter Principle wave to the top of the beach while sinister forces milled about in his wake. Hmmm.
Give the deal a shave with Occam’s Razor and let’s see how clean it comes up…The tell will be when Geithner will only testify if Larry Summers is there and no notes or follow-up questions are allowed, I suppose.
;>)
A very good fantasy, nonetheless.
Geithner will testify right after O allows cspan cameras into the HCR meetings.
I’m pretty sure we will not hear Obama say, “The buck stops with me,” on this matter.
The director of the NY Fed did not know this was going on? And I fell off the turnip truck yestidee.
When this really heats up Obama’ll boot Geithner to the curb, nominate Summers for Treasury and bring Rubin in as his chief economic advisor. No break in the neoliberal chain.
I vote for the Peter Principle. Geithner was in way over his head.
Full court press! Go doggies!
CNN had something on this on Campbell Brown last night so they are continuing to follow it! That is good news. They talked about the Towns call for a hearing and they showed a clip of Gibbs dismissing teh matter. Pretty stunning. They also had Issa on and he sounded **almost** reasonable. He is good on this stuff. Me likey.
The original coverup was outrageous: blaming all the *little* people who were encouraged to buy houses. So why would anyone think any new cover story would be *any* less outrageous. I do not believe a word they say. Never again.
We must see the e-mails.
Or how about this: start with going after AIG for a false filing. See who blames who.
Geithner has a track record of illegal activity. He was foolishly confirmed knowing he was over $100K in hock to the IRS and was basically thumbing his nose at them! He paid only to get confirmed. He’s shady and ruthless and of course he knew about this, but he doesn’t care. He never should have been put in this role.
That NYT headline is SHOW US THE E-MAIL. Go SpitzerCo!
I couldn’t agree more.
Don’t just send him out of DC, send him to Leavenworth.
Explanations about tax irregularities due to an improper understanding of TurboTax having been accepted by Congress and the Whitehouse suggests that the Peter Principle explanation can be applied to a field beyond Geithner.
Worse than W
nominate Summers for Treasury and bring Rubin in as his chief economic advisor.
Scary…
Is Timmy Geithner Stupid and Evil, or is he Smart and Evil? The Geithner flopsweat will tell us.
This is a threat with teeth. Replace Geithner with Summers or just give Rubin the chance to work his magic once again. Rubin and Summers are waiting in the wings in order to make TurboTimmy look ethical.
“You only need two friends in life. A fat one to make you look skinny and a dumb one to make you look smart.”
I’ll be the first to admit I was totally wrong about Obama. But I always liked Elliot for the simple fact he wasn’t afraid of Wall Street. I had actually imagined him as president some day. The fact he liked hookers matters not an iota to me. Don’t even care if he had on socks or wore a tie and fedora. If he would take on Wall Street in what ever means available to him I wouldn’t even care if he fucked goats.
I remember reading that Geithner checked 60 or more indicators everyday, the point being that he was very thorough and detailed in what he did.
It’s also important to parse the denials. Geithner knew about the payouts at par. He also pushed to keep them hidden from the public. The denial seems more to be playing off of Did he specifically order withholding information from the SEC. You see he could have ordered a blanket Keep this thing quiet order and those under him logically assumed that this must also mean keeping info from the SEC because filings to the SEC I believe would have been made public. It is reminiscent of Henry II saying, “Will no one rid me of this troublesome priest?” and then feigning surprise when some of his knights off Thomas Becket.
Of course the bestiality thing might get a bit awkward at State dinners and such.
I’d sure love to know the backstory on how Spitzer was ratted out on that one, and by whom.
Apparently the voters in LA didn’t mind how their Senator Vitter got his kink on.
Spitzer, like Blago, was taken down because he stood up to the Big Banks?
(as if the other 48 governors were angels… Sanford is still there btw)
How much democracy do we really have left?
Americans “own” AIG the same way we “own” Xe/Blackwater.
They are both arms of the CIA: Secret (Insurance) Agent Men
Question is, do Americans own the CIA?
Or does the CIA pwn us?
The answer should be obvious.
Don’t expect accountability for shit.
One strong reason that the “bailout” money should have been structured in such a way as to make the US Treasury [i.e., taxpayers] shareholders/owners of AIG, Goldman, the banks, etc., is that as owners — even partial owners — we can bring shareholder suits for malfeasance by officers, and for failure of oversight by the directors. [There's some of that going on now vs. Goldman by both an individual and a pension fund.]
By structuring the $$$ the way they did, they hoped to avoid oversight and consequences for bad behavior or fraud.
Spitzer is smart and experienced on these issues. So what if he keeps his socks on while he pushes for investigation of this stuff; I don’t mind. [oldhippyjan @ 21 beat me to this reference.]
And Spitzer’s “girlfriend” didn’t end up swinging from a rope. Without an autopsy.
Yeah, I always thought it was a good thing Dumbya wasn’t smart enough to effectively advance his agenda. Now, however, we have Dumbya with a brain.
We’re hosed.
I’m pretty sure that W was also reinterpreting laws without doing signing statements as well. There were plenty of stories of his people appending word definition changes to previously signed documents, including laws that had been on the books before he took office. If Obama was a liberal going back and resetting the new dictionaries to the old definitions he could even do a small amount of good. Yep, wishes fishes.
Yes we do have a huge problem. It has become *ok* to lie. Heck, even the President lies rather than submit another hated signing statement. But it is all because he is too pure to endorse a law that is unconstitutional and he is too bipartisan to challenge an unconstitution law. Heckuva dilemma there. So he signs it and ignores it.
So, when we finally catch them lying after the fact the *only* issue is will we let a false SEC filing *go* or not. And then, heck, well, you know it is *just* a piece of paper. And it was more than a year ago. No harm done. Move on.
David Corn and Kevin Drum talked about this with Bill Moyers last night on PBS (Bill Moyers Journal). I’m sure it’s still there; must see.
I suppose so on W doing it too.
His brain was external in the form of Rove and Cheney which made it very effective.
I *knew* it was a BIG mistake to miss Moyers last night! PBS has video online and transcripts for anyone who wants to follow up on that … like me!
A bigger question is do Americans care?
Blatant and willful violation of the Federal Securities Laws does not rise to Geithner’s level?
Yes, I’m sure the lawyers at the N.Y. Fed didn’t raise it with him. And will gladly take the fall.
He’s toast!
The AIG lawyers originally wanted to make a truthful filing! I am sure *they* knew what their exposure was.
For those of us who gave up teebee it’s the only way we get to see it.
Here’s the link.
Awww…why not? He didn’t know about his taxes….I know, Liar, when you’re with the smartest guys in the room
Journal transcripts make *great* reading. :-)
I think the comparison to van jones is apt and very telling. the WH probably thinks this is different, somehow not political. another example of their MAMMOTH, almost tzar-nicholas like disconnect from the true feelings of voters.
Bigshot NY Fed guy just could not find *any* good tax help. :-((
Ding! Ding! Ding!
Seems to me a lot of other people (like the hapless CNN) ARE *getting* the news that the voters do care. Like I say: good news.
New storyline: *just* how long will it take for the WH to get a clue that people do care.
Did you catch Moyers say, “President Corn?”
I think they “care” to the degree that the facade is crumbling.
As the public finds out more and more just how controlled the U.S. economy has long been by the Shadow Gov’t – as is the case with the media (including online sites/social networks) – as well as how much public prosperity has been sabotaged by TPTB, they will lose that much more confidence in both parties.
We’re already seeing that at new levels.
yeah that was funny. i dont get why they feel the need to play out the theatre that obama might do something that he should. Im starting to see that this country has become one of the latin american puppet client states we created during the cold war. Obama may as well be the president of guatamala. the fruit company is calling the shots.
Remember, Israeli Intelligence has copies of every single e-mail and blackberry transmission of everyone at the top of the government and Fed. Got leverage?
Spitzer I think rehabilitates his stature with people with each appearance on TV. He comes across as extremely bright and genuinely indignant at the wrong doing by rapacious corporations of all stripes, especially in the financial sector.
He can serve a useful role by commenting on the case against Geithner and all others enmeshed in this mess. And in so doing enhance his credibility and maybe put himself in line to recover his governorship of NY. His pursuit of Geithner may be just his ticket back into a position of consequnce.
Geithner on the other hand has every reason to begin counting his days at Treasury as we have all seen this scenario play out many times. And unsurprisingly we see that Obama is more than happy to assume the role of the idiot bystander that gets hit with the fallout. Good riddance to them both.
We can only hope for a little entertainment as Geithner twists in the wind.
Got proof?
Party line: “We can do no wrong. We no nussink. The other guy did it.”
The courts are full of such claims. One would think a little caution, as in, we’re looking into the details, but have confidence that TG would have acted appropriately. Something, that is, that’s qualified by what’s known, as opposed to blanket assertions that require bald-faced repeating when bad facts come to light.
We had eight years of Bush doing that, and it’s the one thing Bush could do better, because he didn’t have a clue. Obama knows better and it will show in his lack of sincerity and conviction.
This is ostrich-style government, a portent that Obama is in over his head and digging his hole in the sand deeper. If so, we ain’t seen nothing yet.
Politically, this is the worst of all possible issues to defend with such blanket, unconfirmed confidence. Anger over the banksters’ influence over Congress and their ruining America to pad their own pockets is widespread and bipartisan. It bloats teabaggers as well as DFH’s. Taking this line in the face of contrary evidence will doom this administration, because this will not be the last such incident before 2012.
The NY Fed’s general counsel is claiming sole responsibility for telling AIG to violate federal securities laws. No top lawyers do that without a) political leadership demanding it, and b) knowledge that in giving that direction to AIG he is already taking one for the team. He might even lose his license if found to have conspired to violate the law or obstruct justice (in a later investigation). Lawyers at this level of their profession don’t do that to themselves and their families without knowing their friends have provided them a safe place to land.
This may be a conspiracy of dunces, but it’s a conspiracy. If Geithner wasn’t in the loop, he was more out of it than Bush. That’s reason alone to fire him as Treasury Secretary on the spot. Otherwise, he will trot out that same excuse in connection with every Treasury debacle that comes to light, and it will be equally convincing.
I wonder how much Goldman will end up paying for his “forced” retirement? He should be able to live quite well.
Agreed. Ignorance or complicity; either way the taxpayer was cheated and this guy needs to go. Shouldn’t have been there in the first place.
Welcome to the Bush III presidency.
I have come to the conclusion that Geithner has simply been doing as he has been told to do. Intelligence and perception have nothing to do with this latest calamity. AIG, now a federally owned corporation, should not have the leeway to pursue anything outside a carefully defined scope of enterprise. Yet, there it is.
The President cannot fire Geithner, because it would become obvious to even the meanest understanding that he is acting at the behest of the President (or rather, the Presidency).
Sure Obama can fire Geithner. He just has to stop asking Goldman Sachs permission to be president. Then again, Bush was never able to stop asking Cheney for the same permission.
Talk about regulatory capture! That’s what I’m sayin, we’ve been jacked by Perkinsian economic hit men acting under the color of law. Who among Obama’s admin are our present-hour EHMs?
Reminds me of Blackwater and the wholesale out-sourcing of intrinsically governmental authority.
So when “chief economists” and our other lords of FIRE stop making sense, IMO, that’s the dead giveaway that they’re making myths. I sure wish EHMs had to wear uniforms to identify them, seeing as they’re NSA-types and all.
Don’t know. I’ve never been to a State dinner. It might be pretty tame stuff. Certainly no worse than the thorough reaming we the people get every time this bunch of liars, thieves, and thugs get together.
you really don’t want to see the proof, but yes.
I’ve always thought it had a certain Roveian stench to it.
Plunger,I was inquiring about you just the other day.
Good to hear from you,again.
“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.”
Hmm.. New York Fed… former playing ground for Geithner. Who’s in Geithner’s shoes there now? … none other than William C. Dudley, former chief economist from Goldman Sachs. Let’s all recall how Goldman Sachs benefited from this whole AIG mess.
Is Dudley (ex-Goldman Sachs) directing a lawyer to make a statement absolving his predecessor (Geithner) from a shady deal that benefited Goldman Sachs?
This whole thing is fucking insane.
@60
Type AIG and Blackstone Group into the search engine of your choice. The Blackstone Group is Pete Peterson’s equity firm. VERY interesting connections there.
Also, Blackstone Group and Enron will provide equally interesting info.
Umm, HOW can they KNOW ,in advance,of Geithner’s complicity or acountability-or lack thereof, WITHOUT having reviewd any of the evidence(e-mails) as of yet?
Ooh, I want to see it. Really.
Links? Anything?
§ 1519. Destruction, alteration, or falsification of records in Federal investigations and bankruptcy
Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.
—
Not being a lawyer, the above quote from Sarbanes-Oxley seems to be saying that the net, even if it didn’t by some bizarre stretch of the imagination include Geithner, has to include at least one lawyer as well as whoever they try to tag as the rogue in the Fed. It may also apply to the people and lawyers in AIG that were involved but failed to bring this to the proper authorities. Another interesting question is whether RICO could be applied where the Fed is involved and ring him in that way.
With 20 years on his hands maybe Geithner could figure out how to do his own taxes. Too bad we have to rely on
Edwin MeeseDick ThornburghJohn AshcroftAlberto GonzalesEric Holder to do the job.mmmmm blackberry jam on hot toast…yummy
Type in Roger Stone+Spitzer on teh google. I b’lieve Stone spent over two million dollars digging opposition research dirt on the Scary Spitzer—imagine Spitzer as AG, rather than that mile o’ shit eater Eric “I’ll Get That Rich Guy A Pardon, Yassir, Boss! Take Your Coat? How About Smoke Your Bone?” Holder…
Doubtless all Stonery happening hidden in plain sight of the pross corpse, probably with a wink and a nudge from the DLC, who curiously don’t seem to have hardly any Jews in their first tier…Nixon’s Lng Shadow still falls over DC.
It seems to me Congress should be deposing that Fed lawyer to discover the records of his malfeasance. Should they discover he doesn’t have the goods on himself then it might be time for Geithner to resign.
Is this enough proof or do you want more?
http://bigdanblogger.blogspot.com/2009/06/israeli-wiretappers-nsa-and-911-are.html
Do you find it hard to believe this? Because it’s not on corporate-owned news?
Tiny Tim is gone. The job was always too big for him, anyway.
Tim looks like a evil version of one of Santa’s elves.
Uh… conspiracy theory much? Israel behind everything now in your mind?
Nice try, pro-Israeli shill. What’s a conspiracy in ANY of this link?
http://bigdanblogger.blogspot.com/2009/06/israeli-wiretappers-nsa-and-911-are.html
Name something in it that’s not true.
You tried the tactic of discrediting what I said by exaggerating what I said – “Israel behind everything” – then attacking that exaggerated point (straw man) which is not what I said.
Further, you brought up the word “conspiracy” to try and discredit me as a “conspiracy nut”.
You tried that tactic on the wrong guy, Bub. You lose when it’s pointed out by the person you’re doing it to.
Why don’t you try this one too:
http://www.youtube.com/watch?v=jUGVPBO9_cA&feature=player_embedded
skepticfoo January 9th, 2010 at 7:19 pm
76
In response to MidnightWalker @ 73 (show text)
Uh… conspiracy theory much? Israel behind everything now in your mind?
Straw Man (Fallacy Of Extension):
attacking an exaggerated or caricatured version of your opponent’s position.
For example, the claim that “evolution means a dog giving birth to a cat.”
Another example: “Senator Jones says that we should not fund the attack submarine program. I disagree entirely. I can’t understand why he wants to leave us defenseless like that.”
On the Internet, it is common to exaggerate the opponent’s position so that a comparison can be made between the opponent and Hitler.
MidnightWalker makes a point about Israel. skepticfoo exaggerates that MidnightWalker says Israel is behind everything.
Straw Man argument of exaggeration to discredit a person’s position by creating another position the person is not saying, and attacking it.
“Israel behind EVERYTHING?”
Stupid enough to believe that an anal control freak like Lying Timothy Geithner did not know what was going on in the Fed he ran. Hey, I’ve got a legal lease to 5 acres in the Atacama desert that you really need. The neighbors are a buncha hillbillies that beat the Incas, beat the Spanish but it is a great plot of land. They’ve only been up the canyon since the last ice age so getting them to help you should be a snap, if you believe in Mr. Smirking Timothy Geithner, you should be happy to pick up the lease.
Timothy Geithner is a criminal. No maybe, no could have been, no excuse, cold blooded criminal. That anyone in the US is doing hard time for shorting the till in a bank while smirking Timothy Geithner is free proves beyond any possible doubt that there is no justice in the US.