Honk if you hate Darrell Issa WITH UPDATE

(11 am. – promoted by ek hornbeck)

I have always hated Darrell Issa.  I live in California and Darrell Issa is largely the reason that we now have Arnold “will my term ever end?” Schwarzenegger in the governor’s hot tub.   He’s also, quite simply, a scumbag.

But remiscent of the Bush years, when I found myself agreeing more with Pat “I’m also a scumbag” Buchanan, than I did with most “mainstream” Democrats like, well, almost all of them, I now want to pat Scumbag Issa on the back.

Why?

Because he’s come out with this:

Geithner’s Fed tried to keep sweet deal for banks a secret


The controversy surrounding Treasury Secretary Tim Geithner’s role in the 2008 Wall Street bailouts was ramped up Thursday with the revelation of emails that show the New York Federal Reserve — then run by Geithner — pressured insurance giant AIG to withhold information about payments the company made to its creditors.

Rep. Darrell Issa (R-CA) obtained emails between AIG employees showing that the company had planned to disclose in its filings to the SEC that it had paid 100 cents on the dollar to creditors like Goldman Sachs and other banks, but “the New York Fed crossed out the reference,” Bloomberg News reports.

AIG has received $183 billion in taxpayer relief. The news that the New York Fed attempted to keep from the public how that money was spent will likely increase political opposition to Geithner’s appointment as Treasury Secretary.

The Bloomberg.com article is here.


Jan. 7 (Bloomberg) — The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”

Will this become a mainstream story?   Well, you’d think so, wouldn’t you?  After all, it paints a “Democrat” in a negative light, and it’s being pushed by a Republican.

But we’re talking about Banksters here, and they don’t play by the rules.   They run the place.  

All these people need to be in jail.  

UPDATE:

Just got the late-night Alternet e-mail which shows the new stories from them.   Elliot Spitzer’s on the case now, with William K. Black and Frank Partnoy, here:

Geithner and the AIG Emails: Scandal Is Only Tip of the Iceberg


In a December New York Times op-ed, we called for the full public release of AIG email messages, internal accounting documents and financial models generated in the last decade. This Thursday, a Bloomberg story revealed that under Timothy Geithner’s leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

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 emails today detail the efforts of the Fed to suppress the disclosure of payments made to banks such as Goldman, Sachs Group for reimbursement of their credit-default swap exposure. When the Treasury Department stepped in, AIG had at least $440 billion in credit-default swaps outstanding. The Fed, led by Tim Geithner, paid Goldman, Sachs Group and other banks 100 cents on the dollar for these instruments rather than negotiating a lower rate closer to the actual value, (estimated by some to have been as little as 20 cents). In testimony to the Congressional Oversight Panel, Tim Geithner insisted it was necessary to make these payments in full, arguing that even a small downward negotiation would prove catastrophic to the financial sector. Elizabeth Warren, head of the oversight panel has repeatedly challenged repeatedly this assertion.

Will Geithner get sacked?   Will he get charged with anything?   Or will he skate, like we fully expect?

I figure he’ll skate.   These days, all the Big Criminals skate.  

18 comments

Skip to comment form

    • Inky99 on January 8, 2010 at 8:01 am
      Author

    and Issa knows another crook when he sees one.  

  1. here:

    It is pretty clear that officials and the likes of Tim Geithner were directly involved in editing documents that would eventually become public disclosures by AIG in the form of SEC filings.  To the extent these filings were knowing material omissions or misstatements of fact Tim, along with executives at AIG, should be heading to jail, right?  Well, not necessarily.  As we wrote two months ago, there is at least one little hitch that permits firms to cook the books and skate off after the fact.  Enter 15 USC 2B § 78m(b)(3)(A):

    With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsection shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provisions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance. (Emphasis added).

    We thought we were just being paranoid when we wondered in print if this provision had been used.  That’s not looking so paranoid anymore.  We wonder, did the President grant such authority?

    National security loophole.  Who could’a’ guessed?

  2. a gift from 2006:

    Now, the White House’s top spymaster can cite national security to exempt businesses from reporting requirements

    President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.

  3. I’m too lazy tonight to even look up my own diaries at the great orange maelstrom of irrelevance, but it’s there.  He was investigating the wrong people.

    • quince on January 8, 2010 at 1:54 pm

    because he “recused himself”. ROFLMAO.  

  4. ….  white collar organized crime type criminal, this is a no brainer.  He’s just smarter than most at staying out of jail.  

    His leadership PAC’s top category of contributors for 2008

    Pharma

    Casinos

    Defense Electonics

    Issa’s ISSA PAC 2010 top categories of contributors

    Casinos

    Pharma

    Defense Electronics

    http://www.opensecrets.org/pac

    Really, we don’t have to be Rocket Scientists™ here to figure this one out, do we ?

    Geithner did what they wanted.  It looked bad in retrospect. They want something else, and are afraid they won’t get it.  So time to throw him to the wolves.

Comments have been disabled.