WASHINGTON — Treasury Secretary Timothy Geithner will face a congressional grilling later this month about the suppression of details on deals that funneled billions to big investment banks while he was president of the Federal Reserve Bank of New York.
Lawmakers reacted angrily Friday to revelations in e-mails sent in late 2008 and early 2009 between lawyers for the New York Fed and American International Group Inc. The exchanges show the New York Fed wanted AIG to withhold information about deals that sent billions from the taxpayer bailout of AIG to Goldman Sachs Group Inc., Societe Generale and other major banks.
“The lack of transparency and accountability is disturbing enough, but the outstanding question is why the (New York Fed) didn’t fight for a better deal for the American taxpayer,” said Rep. Darrell Issa, the top Republican on the House Committee on Oversight and Government Reform, who first obtained the e-mails.
Committee chairman Rep. Edolphus Towns, D-N.Y., said Friday that the e-mails would prompt a review of AIG’s rise and fall and its relationships with the banks that benefited from its bailout. He scheduled a hearing for the week of Jan. 18 and requested appearances by Geithner and New York Fed general counsel Thomas Baxter.
AIG has become a poster child for Wall Street excess. And questions about the company have dogged Geithner long before the e-mails were released this week. Last year, lawmakers lambasted Geithner after it was revealed that millions in bonuses would go to employees in the AIG division that was most responsible for the company’s failure.
