More evidence that the bailout of AIG, and those generous payments to its trading partners, were part of a massive conspiracy that kept US taxpayers in the dark. And another sign that the banks are running the US government. AIG funneled over $90 billion of taxpayer bailout funds to various U.S. and European banks, and the biggest beneficiary was politically connected Goldman Sachs which took $12.9 billion of taxpayer money.
So former Treasury secretary Henry Paulson and his successor Timothy Geithner will testify before a House panel explaining the disgraceful bailout payments to American International Group trading partners that saw the banks getting huge payouts they didn't deserve because their bonds had declined in value.
Maybe while they are up there, they can explain this Reuters scoop that the New York Fed Fed demanded unusual security procedures before supplying "a critical bailout related document" and that the Security and Exchange Commission limited the number of SEC employees who viewed the document to two and kept it locked in a safe. Reuters obtained emails of a New York Fed lawyer which said the SEC had determined that document would not be released to the public and that it be kept "in a special area where national security related files are kept."
Reuters writes: "In another email, a New York Fed official said the SEC suggested in late December 2008, that AIG file the document under seal and then apply to the regulatory agency for so-called confidential treatment, if central bankers wanted to stop the information from becoming public. The emails were included in the mountain of documents the New York Fed turned over last week to the House Committee on Oversight and Government Reform, which will hold a hearing Wednesday into the AIG bailout and the New York Fed's role in trying keep the specific terms of that Fed-engineered rescue in November 2008, from being made public. More than a year later, the Fed's bailout of AIG remains controversial because it funneled nearly $70 billion to 16 big U.S. and European banks that had bought credit default swaps from AIG. Banks like Goldman Sachs Group Inc, Societe Generale and Deutsche Bank had bought those insurance-like derivatives to guard against defaults on hundreds of securities backed by subprime mortgages.
Lawmakers on Capitol Hill have labeled the AIG bailout, in which the New York Fed created a special entity to purchase those securities from the banks at essentially their face value, a "backdoor bailout" for the 16 financial institutions.
Let's be clear here. Regulators were conspiring against the US public.
These banks, which included Goldman Sachs which had employed Paulson, had some real power which created the bailout conditions. And US taxpayers footed the bill while regulators kept them in the dark.
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