Details regarding the billions in bailout money distributed to banks in 2008 were not disclosed under orders from the Federal Reserve Bank of New York, run at that time by Treasury Secretary Timothy Geithner.
E-mail correspondence between American International Group Inc. and the New York Federal Reserve reveal that AIG thought it would be responsible to release choice information regarding bailout payments to banks including Goldman Sachs, to withdraw from financial arrangements.
AIG had little choice in the matter; however, when the NY Fed’s legal team told the insurance giant to keep things quiet. Since the incident, Geithner and the New York Fed have endured considerable public disapproval for the way the situation was handled. Watchdog reports even revealed that billions more than necessary were spent reviving the banks, which began posting large profits again in 2009.
In defense of their lack of disclosure, the New York Fed is claiming the decision to withhold information was made in the interest of avoiding further alarm in the worst financial crisis since the great depression. The taxpayer investments were best served by keeping that information under wraps according to the fed who stands by claims that putting forward less bailout money to the banks or making certain details public could have the catalyst in a more preposterous financial collapse.
California Rep. Darrell Issa, who is the senior Republican on the House Committee on Oversight and Governmental Affairs, came forward with the emails, which he believes further his belief that Geithner is unfit for his position.
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