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New York Fed Faces House Subpoena Over AIG Bailout

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Hugh Son
Bloomberg News
Tuesday, January 12, 2009

Jan. 12 (Bloomberg) — The Federal Reserve Bank of New York will be compelled to hand over documents related to American International Group Inc.’s government bailout after a House oversight committee chairman said he will issue a subpoena.

“To help the committee’s investigation of payments made by AIG to its counterparties, I am issuing a subpoena today to the Federal Reserve Bank of New York,” Edolphus Towns, the New York Democrat who runs the Oversight and Government Reform Committee, said in an e-mailed statement. “This subpoena will provide the committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout.”

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New York Fed Faces House Subpoena Over AIG Bailout  040110banner2

Towns’ attempt to force the New York Fed to provide documents comes after the ranking Republican on the committee, Darrell Issa of California, obtained e-mails showing the regulator pushed AIG to withhold information from public filings about payments to banks. The New York Fed in November declined to provide some documents Issa was seeking without a subpoena, Issa said in a letter to Towns today.

Treasury Secretary Timothy Geithner, who was president of the New York Fed when AIG was rescued, had been asked by Towns to testify during hearings scheduled for next week. The New York Fed’s general counsel, Thomas Baxter, said last week that Geithner wasn’t aware of efforts to limit New York-based AIG’s bailout disclosures because he didn’t think the issue merited Geithner’s attention.

Full story here.

This article was posted: Tuesday, January 12, 2010 at 12:07 pm





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