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Email disclosures by AIG, responding to subpoenas from the House Oversight Committee, have revealed that the New York Federal Reserve requested that information about the AIG bailout be kept secret as if it were connected to national security.
U.S. securities regulators originally treated the New York Federal Reserve’s bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.
The request to keep the details secret were made by the New York Federal Reserve — a regulator that helped orchestrate the bailout — and by the giant insurer itself, according to the emails.
The emails from early last year reveal that officials at the New York Fed were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that “special security procedures” would be used to handle the document.
As Ryan Grim notes, these are basically unprecedented steps to keep secret the details of the AIG deal with counter-parties. The emails tell a story of strictly enforced secrecy and massive PR efforts to get securities regulators and Congress to stand down on disclosure. It paints a picture of the Federal Reserve as evading not only the oversight responsibilities of Congress, but any effort to offer insight into their activities whatsoever. And the SEC eventually agreed to the request:
The SEC, according to an email sent by a New York Fed lawyer on January 13, 2009, agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG’s confidentiality request.
The SEC had also agreed that if it determined the document should not be made public, it would be stored “in a special area where national security related files are kept,” the lawyer wrote.
Tim Geithner and Ben Bernanke are in their own ways culpable for this astonishing level of secrecy attempted by organizations they ran to get around accountability for the AIG deal. Geithner faces the House Oversight Committee in hearings on Wednesday.
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More background from NYT, and see links to Gretchen Morgenson story.
http://dealbook.blogs.nytimes.com/2010/01/24/a-rift-at-the-fed-over-the-bailout-of-aig/?scp=1&sq=Geithner,%20AIG%20bailout,%20Federal%20Reserve&st=cse
Totally Off Topic but I thought important…
Yesterday this was released: “White House Decides to Outsource NASA Work” (http://online.wsj.com/article/SB10001424052748704375604575023530543103488.html?mod=rss_US_News). This looks to me like a humongous giveaway of tax-payer paid for research (medical, engineering, IT and all kinds of basic and advanced research of a cross-disciplinary nature) and key innovations– some of which I bet the public has never known about. It also looks like a very strategic test case for privatizing Fed agencies wholesale (although I think this is the last agency left that corporations think have any value to them; corporations already have ground floor research access at the Universities). In view of the super low confidence the public is signalling in the Federal government, I can’t see how anyone but the international banks and the related special interests could be in favor of this at the moment.
I fail to understand how secrecy here accomplishes anything other than casting a pervasive pall of apparent corruption over the entire issue.
The economic advisors to the President, Summers, Geithner, et. al., are either a) incompetent, or b) incredibly corrupt. There are no other options available, in the face of this report.
Everyone involved in this graft should face something more than a congressional panel filled with sympathetic co-conspirators. There is absolutely no accountability in Washington, and the tendency of politicians to cover up what damages them politically guarantees that, as far as they are concerned, there will be none in the future. This can’t be sustained.
It’s time for the public to come to grips with the sad fact that the government was literally overthrown in the “Reagan revolution” which has led us to this tragic point in our history: All 3 branches of government are controlled by multinational corporations who loot the treasury and stiff the people.
Secrecy is the hallmark of despots the world over. We either have a government of the people, by the people and FOR the people, or we don’t. The corporate criminals in Washington know the answer. It’s the public that naively trusts its government to do the right thing by them, while in reality the government severed its commitments to its people decades ago.
As The Call once sang,
“I don’t believe there are any Russians,
And there ain’t no Yanks,
Just corporate criminals,
Playing with tanks.”
This is one of those stories that progressives latch on to hoping against hope a miracle will happen and it will blow up into A Really Big Scandal.
But: realistically, what are the odds that it will?
We know that nothing of any significance gets done inside the beltway without a carefully coordinated powwow between New York and Washington. So, of course AIG, the big banks and the power brokers inside Congress and the White House were in close communication regarding both the problems and the solutions.
But, as always, the ruling class will cook the books and the “scandal” will slide off page 23 in the Washington Post into oblivion.
Besides, they can always claim that secrecy was of the utmost importance because The Fate of the Entire World Economy Was At Stake!!! Hell, there are reports surfacing now that the economic collapse was being treated as akin to a threat against “national security”. And everything and anything can be justified then, right?
Unless, of course, I’m wrong.
Geithner faces the House Oversight Committee in hearings on Wednesday.
Quaking in his boots. Not.
By the way, to the right of this box is an advertisment for The Economist. You do know that for all intents and purposes The Economist is an offical organ of the Bilderberg agenda? It’s not for nothing that Obama keeps it next to the Bible and Sports Illustrated on his nightstand.
You want to change the world and you advertise publications that are doing everything in their power to keep it just the way it is.
Let me guess: You’re playing them? ; – )
Off topic
Obama will propose a spending freeze.
I bet that will be a hit with the progressive base. Not.
Jesus Mary and Joseph these Wall Street/banking folks have no shame no conscience.
They set up the system, pushed hard for deregulation and then turn around and want their losses socialized.
George Carlin says it best
“they own us” “And they don’t give a fuck, they don’t care”
George Carlin cuts through the bull
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385×376352
I just heard the spending freeze. Guess what will not be frozen? Defense and a few other things. Just can’t say no to more defense spending.
Citizen David Dayen:
That’s Waxman’s committee, right? Are there ANY decent investigators and interrogators besides Waxman on that sorry crew? What are the chances that the committee scorches his lyin’ ass…or will the Democrats feel obligated to protect Obama’s Tiny Tim from the big bad Republicans? It seems to me that Waxman has gotta get out in front on bringin Geithner and Bernanke into the spotlight, to hell with the political atmospherics. Obama has gotta be hit in the head with the fact that with all his “charisma” he can’t get ANYone elected and that his enemies are in his administration.
They are all, Summers, Geithner and “others”, both things.
Incompetent and corrupt.
Incompetent by design.
Corrupt because they may be so with TOTAL impunity.
Both behaviors are lucrative and will see them all comfortably through the rest of their lives.
However, the public must not ponder as to whether there is a suitable punishment for what has been so cynically done, as that would neither be polite nor politic.
DW
And yet, Bernanke just MUST get reappointed and the Congress will ignore his role in this crap.
Business as usual!
Thanks for covering this, blew my mind when I learned of it earlier. If anyone’s surprised, it shows you haven’t been paying attention to people like John Perkins and Russ Baker.
That our hose of credit cards economy has come crashing down isn’t just an unforeseeable act of nature; as with Haiti, the history of our economic hit jobs set us up for this (economic hit) man-made disaster.
Coincidentally, the SAME day as the (sorry) State of the Union address.
Great article about the real story of the AIG bailout.
http://www.huffingtonpost.com/david-fiderer/how-paulsons-people-collu_b_435549.htm
That’s right, DW. we’re at liberty to do exactly as we’re told to do by our
overlordselected representatives, if we know what’s good for us. We’re getting pissed on by the “rainmakers,” shat on by the law-givers, and they wonder why we’re upset with them.Maybe its just me, but doesn’t this sound like collusion ,i.e.,racketeering?
Exactly. We have the best government corporate money could buy us, which is to say, the most corrupt possible.
This is what our politicos want, and, by their actions (or lack thereof), they continue telling us this is how it’s going to be. Oversight is so yesterday. Laws are for the little people, not corporations.
Dennis Green says what I feel about the 2008 election and the response of our President, and that of the so-called Democratic majority in Washington, to the corruption preceding it (which continues unabated):
http://www.youtube.com/watch?v=m_N1OjGhIFc
Waxman talks the talk, but never acts. Never. His job appears to be to thrill progressives with appearances.
His committee is as toothless as its investigations are meaningless. I lost all respect for him over the past DECADE when he accomplished absolutely nothing with the committee he chairs.
We get lip service, and nothing changes. If Washington cared a whit about the citizens not called “multinational corporations,” they’d act daily to serve the public good. They do not. Ergo, they serve a different constituency than the one they deceive for votes.
It’s not just you.
Quit whining, you bedwetters. We must always look forward, never backward. You don’t want to be thought of as backward-thinking people, do you?
Ever wonder why it is that criminal defense lawyers aren’t allowed to make that argument the essence of THEIR defense strategy?
“Your Honor, these charges must be dismissed immediately. Sure, my client raped and killed children last year, but that was in the past, and we should look forward, not backward.”
Yes it does very much look that way. And it wouldn’t be a first, they threatened to use RICO against Milken&friends in the 80′s….
The important thing is to keep shining that bright light into dark places and support our champions(in this case, men such as William Black).
Hey, I just came across another example of secrecy on steroids . There’s some precedent for this,apparently.
This is a humdinger-and a MUST read!
Pattern and practice,folks.
Federal Reserve maintains total secrecy on IMF bailout | Human …Federal Reserve maintains total secrecy on IMF bailout from Human Events provided by Find Articles at BNET.
findarticles.com/p/articles/mi_qa3827/is…/ai_n8793720/ – Cached – Similar
Officials of the Federal Reserve Bank in New York have informed HUMAN EVENTs that there are no minutes, documents, or notes pertaining to a December 24 meeting at the bank attended by senior executives of six U.S. commercial banks that have large debt exposures in Asia.
The bank also declared that it is immune from the Freedom of Information Act and therefore would not have to surrender any documents about the meeting even if they existed.
On December 24, Fed officials and senior executives of six commercial U.S. banks gathered at the New York Federal Reserve Bank with its director, William … (Excerpt)
Federal Reserve maintains total secrecy on IMF bailout | Human …Federal Reserve maintains total secrecy on IMF bailout from Human Events provided by Find Articles at BNET.
findarticles.com/p/articles/mi_qa3827/is…/ai_n8793720/ – Cached – Similar
Yeah, the American public may have a frightfully limited knowledge of history but asking them to forget last year is beyond the abilities of even the best spin doctors. Politicians that support a “turn the page” approach are just asking for a very early retirement.
I’d be curious to see poll data regarding the public’s opinion of Geithner, Summers and Bernanke.