Wednesday, January 27, 2010

Breaking: Darrell Issa Requests Subpoena in AIG/Fed Bailout Cover-Up

Rep. Darrell Issa of the House Oversight Committee has asked to Committee Chairman Towns to subpoena more documents from the Fed regarding its decision-making process in the AIG bailout. Readers have no doubt noted that the efforts so far have been to try to infer how much Geithner was involved in this process. We’ve noted before that this focus falls short, that major decisions on AIG MUST have also gone to the Board of Governors, or at least to Bernanke.

Issa believes there is evidence that says Bernanke overruled his staff and authorized the rescue:

Request by Darrell Issa for subpoena for further Fed documents
Picture 25

In addition, Issa has noted that the Fed had failed to comply in full with previous subpoenas, and has not released any documents relative to AIG prior to September 2008 or after May 2009, even though they fall within the scope of previous subpoenas.

More on this topic (What's this?)
Gerald Celente: US oligopoly is a big lie (Investment Postcards from Cape Town, 8/10/10)
A Brief Timeline of the Financial Crisis, As Told by our Genius Leaders (Expected Returns, 8/19/10)
THIS IS NOT THE 1930′S (THE PRAGMATIC CAPITALIST, 8/15/10)
Read more on 2008 Financial Crisis, Federal Reserve, American International Group at Wikinvest

Topics: Banana republic, Banking industry, Credit markets, Derivatives, Federal Reserve, Politics

Email This Post Email This Post Posted by Yves Smith at 7:25 pm

8 Comments » Links to this post

8 Comments:

  • Blurtman says:
    January 27, 2010 at 8:04 pm

    Go Darrell!

    Would it be too much to ask that you also instruct the DOJ to indict Hank Paulson for fraud?

  • joebhed says:
    January 27, 2010 at 9:16 pm

    Oh, and by the way Representative Issa, the Federal Reserve is a private corporation and is not subject to any specific review by any body of the Congress, nor its Freedom of Information Act.

    We need a new money system.
    Let the private bankers go back to banking.

    • Yves Smith says:
      January 27, 2010 at 9:20 pm

      That was not the position the Fed has taken. For instance, when the general counsel of the NY Fed repeatedly in testimony discussed how it was necessary to keep Maiden Lane III transaction-level details secret to save taxpayers money. Similarly, the Board of Governors and the NY Fed have responded to Freedom of Information Act requests. They have disputed them for various reasons, but have never argued that they are not subject to them by virtue of being a private corporation.

    • Siggy says:
      January 28, 2010 at 12:04 am

      You need to familiarize yourself with the legislation of 1913 and subsequent admendments. The Federal Reserve System is subject to Congressional review. The Chairman is appointed by the President upon the advice and consent of the Senate. The entire Federal Reserve System of banks are entirely dependent upon the Congress for their National Charters and those State Chartered banks that elect to join the system agree to abide by the rules of System.

      No No, the Federal Reserve System is a Government authorized ogolipoly. Get it right!

      As to the subpoena; the Congress can subpoena anyone or entity it damm well pleases, its the law of the land.

      This whole business of not publishing the facts regarding AIG requires sunlight and airing. Most of the critical facts have been revealed; nonetheless there remain details that have not yet been exposed and there is no reason to withhold the facts.

      I watched Geithner and part of Paulson today. My impression is that there is a coverup in progress and the reason is not yet entirely clear.

      • Siggy says:
        January 28, 2010 at 12:06 am

        As to needing a new monetary system, you have that right. In fact that is right enough to garner a C++.

  • Foghorn says:
    January 27, 2010 at 10:01 pm

    These are interesting times indeed. I had long ago pegged Issa as a typical blowhard SoCal right wing asshole, and now he’s on the side of the angels….

  • Robin says:
    January 27, 2010 at 10:10 pm

    It seems Senator Barf Bunning is leading the fight in the Senate against Bernanke.

    http://www.huffingtonpost.com/2010/01/26/is-bernanke-hiding-a-smok_n_437509.html

    Bunning, in his letter to Dodd, is equally specific, citing nine particular documents that the Senate should review before voting to confirm Bernanke:

    1. Agenda and materials for 11/12/2008 meeting of the Board of Directors of AIG (containing minutes of previous board meetings). [AIG_11.12.08_BOD.pdf]

    2. Agenda and materials for 1/14/2009 meeting of the Board of Directors of AIG (containing minutes of previous board meetings). [AIG_01.14.09_BOD.pdf]

    3. Memo “Issues Related to Possible IPC Lending to American International Group” presented to the Board of Governors for approval of lending to AIG, dated 9/15/2008. [pages sb-aig-01000092 to sb-aig-01000125]

    4. Email from Chairman Bernanke including a draft of the memo to be presented to the Board of Governors for approval of lending to AIG, dated 9/15/2008. [Draft Memo on AIG.pdf]

    5. Memo “Proposed Securities Lending Facility for American International Group, Inc. (”AIG”)” presented to the Board of Governors for approval of the securities lending facility for AIG, dated 10/6/2008. [Board Mtg_10-6-2008_8.35.05_AM.pdf]

    6. Memo “Proposed Steps to Stabilize American International Group, Inc.” presented to the Board of Governors for approval of restructuring assistance to AIG and creation of Maiden Lane II & III, dated 11/6/2008. [AIG restructuring Board memo Final (Nov. 6, 2008)_11-6-2008_4.55.19_PM.pdf]

    7. Spreadsheet describing the assets purchased by Maiden Lane II and Maiden Lane III. [BLK_12.31.08_MLII & III cusip data.xls]

    8. Spreadsheet listing derivative transactions and counterparties for Maiden Lane III. [List of Derivative Transactions.pdf]

    9. Email exchange regarding restructuring of assistance to AIG, initiated by Treasury Secretary Timothy Geithner, dated 03/01/2009. [AIG Emails, Part3.pdf]“

  • dilbert dogbert says:
    January 28, 2010 at 5:13 pm

    Ah, Darrell Issa, the car radar speed trap detector man is on the hunt. I remember Darrell as the guy who funded the recall of Grey Davis and got his lunch eaten by Arnold. I think it was 1.4 million down the drain. It puzzles me why anyone wants to be governor of the great late state of California.
    Good to hear that he is staying busy.

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