Explosive emails released last week could see Treasury secretary Timothy Geithner become embroiled in criminal charges for his role in a cover up that exposes the monumental criminality behind the $182.3 billion bailout of American International Group Inc.
In November and December 2008, The Federal Reserve Bank of New York instructed the bailed out AIG to hide from the public details regarding payments the insurance giant made to banks, including Goldman Sachs Group Inc. and Societe Generale SA.
Using Fed secured taxpayer bailout money, AIG paid several banks 100 percent of the face value of credit-default swaps, as other financial institutions were negotiating deep discounts for the unregulated paper assets that do not have to be backed by cash.
The decision to pay the banks in full may have cost AIG, and therefore taxpayers, at least $13 billion over the odds.
The “backdoor bailout” of the banks, as it has been dubbed was exposed in March 2009 after the SEC challenged AIG’s filing, however, e-mails obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee, have re ignited the situation as they conclusively expose a collusion between AIG and the Fed to deceive the public.
The e-mails between company and regulator, released last Thursday, show that The New York Fed crossed out reference to the payments and that AIG also omitted the details when the Securities and Exchange Commission filing was made public on Dec. 24, 2008.
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