The battle for transparency at the Federal Reserve just ratcheted up a notch. Edolphus Towns, the chair of the House Oversight and Government Reform Committee, just issued a subpoena to the New York Federal Reserve Bank, asking for documents related to AIG and their counter-party payments. As we’ve been tracking, the NY Fed, then under the direction of Treasury Secretary Timothy Geithner, advised AIG to hide information on counter-party payments from federal regulators, according to recently disclosed emails.

Here’s Towns’ statement, and note the use of the phrase “backdoor bailout”:

“To help the Committee’s investigation of payments made by AIG to its counterparties, I am issuing a subpoena today to the Federal Reserve Bank of New York. This subpoena will provide the Committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout.”

The initial email disclosure came from the ranking member on the Oversight Committee, Republican Darrell Issa, so both parties are seeking answers in this case.

The Federal Reserve and its member banks have been notorious on the subject of secrecy during the financial crisis. Today, Bloomberg reported that they are seeking to block the release (through a Bloomberg FOIA request) of the identities of who received relief as part of their $2 trillion loan program. We’ll see how one of its member banks takes to a Congressional subpoena.

The Federal Reserve took in $45 billion dollars in profit last year, according to the Washington Post. But its balance sheet is still fraught with secrets and unknown liabilities, and the outstanding investments still risk an unknown level of losses in the future.

There is still no word on whether Treasury Secretary Geithner will appear before the Oversight Committee at hearings, which are expected next week.