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New York Fed Faces House Subpoena Over AIG Bailout
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| Contributor | particleman |
| Last Edited | particleman Jan 12, 2010 07:06pm |
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| Category | News |
| Author | Hugh Son |
| News Date | Wednesday, January 13, 2010 01:00:00 AM UTC0:0 |
| Description | The Federal Reserve Bank of New York may be compelled to hand over documents related to American International Group Inc.’s government bailout after the chairman of a House oversight committee said he will issue a subpoena.
Edolphus Towns, the New York Democrat who runs the Oversight and Government Reform Committee, said in a statement that he will issue a subpoena today to get New York Fed records concerning the decision it made to fully reimburse AIG’s partners. Banks including Goldman Sachs Group Inc. and Societe Generale SA were among beneficiaries of AIG’s rescue, called by lawmakers a “backdoor bailout” for financial firms.
“This subpoena will provide the committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout,” Towns said in his statement. Jack Gutt, a spokesman for the New York Fed, didn’t immediately return a call seeking comment.
Geithner, now the head of the Treasury Department, was asked by the oversight committee last week to testify in public hearings about what he knew of the New York Fed’s efforts to limit disclosure of the payments. Thomas Baxter, general counsel of the New York Fed, said last week that Geithner wasn’t aware of the issue because the lawyer didn’t think it merited Geithner’s attention.
Meg Reilly, a spokeswoman for the Treasury Department, declined to comment on whether Geithner would testify. She said last week that while at the New York Fed, Geithner “was recused from working on issues involving specific companies, including AIG,” after he was nominated for the secretary post on Nov. 24, 2008. The e-mail correspondence between the New York Fed and AIG released last week begins on Nov. 24, 2008. |
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