Tag Archives: Neil Barofsky

William Black: “Fire Holder, Fire Geithner, Fire Bernanke”

26 Tuesday Oct 2010

Posted by in AIG, bailout, Financial Crisis, Foreclosures, Justice Department, Obama administration, too big to fail, Wall Street

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Lisa Epstein and William Black on Dylan Ratigan’s show yesterday:

Speaking of Geithner telling “one lie after another”:

“The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.

“In our view, this is a significant failure in their transparency,” said Neil M. Barofsky, the inspector general, in an interview on Monday.”

Zero Hedge has more of Mr. Barofsky’s report:

“This conduct has left the Treasury vulnerable to charges it has manipulated its methodology for calculating losses to present two different numbers depending on its audience: one designed for release in early October as part of a multifaceted publicity campaign touting the positive aspects of TARP and emphasizing the reduction in anticipated losses, and one, audited by the GAO for release in November as part of a larger audited financial statement. Here again, Treasury’s unfortunate insensitivity to the values of transparency has led it to engage in conduct that risks further damaging public trust in the Government.”

‘Manipulated its methodology for calculating losses?” Didn’t Jeff Skilling and Andy Fastow go to prison for that?

“Risks further damaging public trust in the Government?” Is that even possible?

TARP Inspector General Could Have Geithner In His Sights

29 Thursday Apr 2010

Posted by in AIG, bailout, economy, Financial Crisis, Goldman Sachs, Politics, too big to fail, Wall Street

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Timmy might have bigger problems than his inability to use Turbo Tax. Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, is looking into filing charges in the New York Fed’s handling of the AIG–Goldman Sachs monkey business. From Bloomberg:

“The TARP watchdog has…criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.

The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.

In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16. “

All I want for Christmas (or Memorial Day, or the 4th of July, or Labor Day, or…) is a REAL Treasury Secretary, not a Wall Street lackey who is susceptible to whiplash every time Jamie Dimon or Lloyd Blankfein make a sudden move. Barofsky, make my wish come true.

Geithner, Paulson, and Bernanke at the Oversight Committee Hearings

29 Friday Jan 2010

Posted by in Congress, economy

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Putting different pieces of testimony from yesterday’s hearings before the House Committee on Oversight and Government Reform, it’s easy to see how the New York Federal Reserve’s “backdoor bailout” of Goldman Sachs and other large banks, via insurance giant AIG, became such a convoluted mess–nobody knew anything about it. Least of all the people who were allegedly in charge– Larry, Moe, and Curly former Treasury Secretary Hank Paulson, Fed chairman Ben Bernanke, and then head of the New York Fed and present Treasury Secretary Timothy Geithner.

“Henry Paulson, who was Treasury secretary at the time, told the House of Representatives Oversight and Governmental Affairs Committee that he had no role in the negotiations that settled the banks’ insurance-like contracts, called credit default swaps, with AIG for 100 cents on the dollar..”

Geithner: “I had no role in making decisions regarding what to disclose about the specific financial terms.. and payments to AIG’s counterparties.” To which Rep. Dan Burton replied:

“U.S. Federal Reserve Chairman Ben Bernanke said on Wednesday he was not directly involved in negotiations with the counterparties of insurance giant AIG, having delegated the duties to the New York Fed.”

“It stretches credulity for us to believe that you had no role in this and didn’t know anything about it when your attorneys and people that worked for you were sending emails all around the place and you were the head of the Fed and you didn’t know anything about it. It just doesn’t make any sense to me and I think a lot of my colleagues feel the same way.”

One thing is clear, though. Despite the Three Stooges being completely in the dark, Government Goldman Sachs made out like bandits in the entire sordid affair. I’m sure it’s strictly coincidental that:

“Paulson is an ex-Goldman chief executive, Geithner’s chief of staff previously worked for Goldman, and Dan Jester, a Treasury point man in the AIG bailout, is a Goldman alum.”

That surely had nothing to do with this:

“An unredacted document obtained by the Huffington Post list the damage in detail. Goldman Sachs alone, for instance, got $14 billion in government money for assets worth $6 billion at the time — a de facto $8 billion subsidy, courtesy of taxpayers.”

But yet Geithner testified yesterday that, “In the end, the prices paid for the securities were their fair market value.” Fair to who, Tim?

Geithner also testified that time was of the essence in bailing out AIG, that there was no time to negotiate terms which might be more favorable to the Fed. But yet:

“Neil Barofsky, the special inspector general tracking the use of taxpayer bailout funds…disclosed this week that he’s opened investigations into the Fed’s candor about the matter, recalled that Paulson, Bernanke and Geithner leaned weeks earlier on failing investment bank Bear Stearns to accept $2 a share to turn over its assets to banking goliath J.P. Morgan Chase.”

I guess there aren’t enough Bear Stearns friends in high places.