POWIP Piece of Work In Progress

Federal Court Moves To Compel Geithner To Testify

In a very important decision, a Federal Court hearing a case involving the AIG bailout says that because representatives of the Fed have not been sufficiently forthcoming in their testimony, Timothy Geithner must answer questions put by plaintiffs:

* Why he forced AIG to take on so much debt that AIG’s credit rating, already in peril, was sure to collapse without yet additional government funds, essentially guaranteeing AIG would remain a ward of the state?
* Why he imposed such Draconian terms on AIG that there was no way it could survive without additional billions from U.S. tax payers?
* Why he then used AIG to secretly funnel 100% payoffs to AIG’s counterparties, including his colleagues and friends at Goldman Sachs, Merrill Lynch, and the European giant, Société Générale. In other words, why did Geithner decide to destroy AIG’s chances of survival as a private entity while surreptitiously saving and preserving private ownership of other domestic and foreign financial companies? And,
* Why he took control of 80% of AIG’s voting shares without legal authority to do so and used a fraudulent trust arrangement to conceal the illegal takeover?

Meanwhile, Cuomo's looking into Bank of America's purchase of Merrill Lynch. It seems there may have been material misstatements of fact in the filings. Strangely, SEIU is pushing this investigation, apparently unaware that the scheme to acquire greater regulatory powers over banks---and to milk them in the process---goes to the heart of Obama's agenda and could cause a serious meltdown in his administration when exposed.

Dan Collins

Dan Collins is a dude who blogs. He used to blog elsewhere. Now he blogs here.

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