The Federal Reserve Bank of New York pressed American International Group Inc. to withhold details of controversial deals that funneled billions in bailout money to Goldman Sachs and other banks.
E-mails provided by Rep. Darrell Issa, R-Calif., show lawyers representing the New York Fed asked AIG to remove the information from a draft financial disclosure. Treasury Secretary Timothy Geithner was president of the New York Fed at the time.
The deals were part of a massive rescue effort at the peak of the financial crisis.
Lawmakers and others have accused Geithner’s Fed of overpaying banks, including Goldman and Deutsche Bank, to cancel deals with AIG.
Issa said the information raised new doubts about Geithner’s qualifications.
“This begs the question, knowing what we know now: Would he have even been confirmed?” Issa said in a statement.
The New York Fed says forcing the banks to take losses or disclosing more information could have worsened the crisis. New York Fed spokesman Jack Gutt said such exchanges between lawyers are routine and that it was AIG’s responsibility to decide what had to be disclosed.
Treasury spokeswoman Meg Reilly said in a statement that this part of the AIG bailout “is on track to be paid back in full with interest so that taxpayers will be made whole.”
“Somehow that fact that the government’s loan is ‘above water’ gets lost in all the consternation,” she said.
The e-mails were reported earlier by Bloomberg News. (AP)
