Secretary Geithner's Got Some Explaining to Do

American Thinker ^ | March 1, 2010 | David Yerushalmi

[opentalk]

While everyone, including Congress, the media, and the public, have focused on AIG's $100-million bonus payments to key employees, and most recently on AIG's stealth payments to counterparties like Chase and the French giant Société Générale -- the latter made worse by the fact that it was the Federal Reserve (FED) that wanted to keep these payments hidden from public view -- the problem with the AIG bailout is much deeper and more fundamental.

Just about everyone has had something to say about this bailout -- mostly that it was an ugly but necessary step to stave off a domino effect that would have brought the world's financial system to its knees. But what we have not yet heard is just how Treasury Secretary Geithner, as then-head of the NY FED, got away with taking ownership of 77.9% of AIG's equity and voting rights in clear violation of the law.

...The brute fact that now standing exposed before us is the use of an invalid Trust structure to conceal the unlawful ownership and control over 77.9% of AIG's equity and voting rights by the FED. If Geithner knew he was breaking the law, then this just happens to be the definition of criminal money-laundering under Title 18, Section 1956. Secretary Geithner has some explaining to do to AIG's public shareholders. We suggest that he seek legal advice first -- but this time, from lawyers who actually know what they are doing.

[opentalk]

Full article at link here

[hoosiermama]

If Geithner knew he was breaking the law, then this just happens to be the definition of criminal money-laundering under Title 18, Section 1956. Secretary Geithner has some explaining to do to AIG's public shareholders. We suggest that he seek legal advice first -- but this time, from lawyers who actually know what they are doing.

[Dewey Revoltnow]

Eric Holder will get right on it! /sarc

[Rockingham]

The terms of the bailout were similar to what the FDIC often does with insolvent banks. As in such cases, the NY Fed may have insisted on taking AIG’s equity to be able to install new management and controls to prevent preferential treatment of creditors and other abuses. Companies that are going bankrupt often get manipulated or looted, with rich pickings for bankruptcy lawyers as they sort out the mess.