Independent probes into AIG rescue
By Daniel Wagner |
January 27, 2010, Wednesday
|
Print Edition
Print Edition
AN independent investigator is launching two probes into the government's rescue of American International Group Inc and the insurer's subsequent payments of billions to big banks.
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says the Fed withheld documents he requested when auditing AIG's "backdoor bailouts" of banks it did business with, including Goldman Sachs Group Inc.
Barofsky's allegations came in prepared testimony provided to members of the House Committee on Oversight and Government Reform and obtained by The Associated Press.
The Federal Reserve Bank of New York produced 250,000 pages of documents after committee Chairman Edolphus Towns issued a subpoena earlier this month.
Barofsky says in the testimony prepared ahead of his scheduled appearance before the committee today that "issues have come to light that call into question whether the government has been and is being as transparent as possible with the American people."
In the testimony he also blasts Treasury for issuing misleading public statements and outlines new investigations into the Federal Reserve and the New York Fed.
Because of Towns' subpoena, "documents have come to light that were not provided to the (watchdog) audit team during the course of the audit," Barofsky says, leading him to "review the extent of the Federal Reserve's cooperation."
The committee is investigating why the New York Fed, then led by Treasury Secretary Timothy Geithner, agreed to pay banks billions of dollars to cancel their contracts with AIG, which is based in New York.
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says the Fed withheld documents he requested when auditing AIG's "backdoor bailouts" of banks it did business with, including Goldman Sachs Group Inc.
Barofsky's allegations came in prepared testimony provided to members of the House Committee on Oversight and Government Reform and obtained by The Associated Press.
The Federal Reserve Bank of New York produced 250,000 pages of documents after committee Chairman Edolphus Towns issued a subpoena earlier this month.
Barofsky says in the testimony prepared ahead of his scheduled appearance before the committee today that "issues have come to light that call into question whether the government has been and is being as transparent as possible with the American people."
In the testimony he also blasts Treasury for issuing misleading public statements and outlines new investigations into the Federal Reserve and the New York Fed.
Because of Towns' subpoena, "documents have come to light that were not provided to the (watchdog) audit team during the course of the audit," Barofsky says, leading him to "review the extent of the Federal Reserve's cooperation."
The committee is investigating why the New York Fed, then led by Treasury Secretary Timothy Geithner, agreed to pay banks billions of dollars to cancel their contracts with AIG, which is based in New York.
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