Jan 27, 2011
Even though Goldman Sachs execs testified on the Hill that AIG bailout funds it received did not stay with the bank, but were dispersed as compensation to clients and institutions on the other side of a prop trade gone wrong, it actually kept $2.9 billion for itself, according to a report by the FCIC.
Remember, Goldman faced a hearing in July of 2010 about the bank’s exposure to AIG.
That’s when CFO David Viniar and MD David Lehman testified they knew nothing about AIG funds landing in the bank’s private reserves.
Then two weeks later, according to the report, Goldman sent an the e-mail acknowledging that $2.9 billion in AIG funds did in fact end up in its own account.
The bipartisan report, which the Huffington Post obtained and read before its official release today, looks into what caused the financial collapse.
According to the FCIC:
The total was for proprietary trade. Unlike the $14 billion received from AIG on trades in which Goldman owed the money to its own counterparties, this $2.9 billion was retained by Goldman.
Most of the $2.9 billion came soon after AIG got its $182 billion taxpayer bailout.
A great way of explaining why taxpayers have a right to be furious about this new revelation is, “if these allegations are correct, it appears to have been a direct transfer of wealth from the Treasury to Goldman’s shareholders,” which an analyst told the HuffPo.
Taxpayers were told the AIG bailout was absolutely necessary to save the economy, not to save an investment bank that would emerge from the crisis pretty much unscathed.
When news broke back in ’09 that Goldman had received about $14 billion from the AIG bailout, the bank categorically denied accusations that any money had gone into its own private account.
Their line was that they were not a bailout recipient, and they stuck to it.
But the email that the FCIC report describes, which the bank itself authored, shows that was a lie.
The full report gets released at 10 am.
This article was posted: Thursday, January 27, 2011 at 8:49 am