ÿþ<html> <head> <meta http-equiv="content-type" content="text/html;charset=iso-8859-1"> <title>OnlineColumnist®.com: Putin Punishes Georgia</title> <meta name="generator" content="Adobe GoLive 4"> <style type="text/css"> .style3 { height: 26px; } .MsoNormal {} h1 {margin-bottom:.0001pt; page-break-after:avoid; font-size:12.0pt; font-family:"Times New Roman"; font-weight:normal; text-decoration:underline; text-underline:single; margin-left: 0in; margin-right: 0in; margin-top: 0in; } .style4 { font-size: large; font-weight: bold; font-family: Arial; } .style6 { text-decoration: underline; } .style7 { font-size: x-large; font-weight: bold; } </style> </head> <body bgcolor="white" vlink="black"> <center> &nbsp;<table cool width="624" height="2719" border="0" cellpadding="0" cellspacing="0" gridx="16" showgridx gridy="16" showgridy> <tr height="79"> <td width="133" height="118" rowspan="2" valign="top" align="left" xpos="0"> <a href="aboutdiscobolos.html"><img height="110" width="62" src="images/discobolos.logo.transp.gif" border="0"></a></td> <td width="7" height="118" rowspan="2"></td> <td width="482" height="79" colspan="2" valign="top" align="left" xpos="140"><img height="75" width="450" src="images/banner.GIF"></td> <td width="1" height="118" rowspan="2"></td> <td width="1" height="79"><spacer type="block" width="1" height="79"></td> </tr> <tr height="39"> <td width="182" height="39"></td> <td width="300" height="39" valign="top" align="left" xpos="322"><a href="aboutdiscobolos.html"><img height="14" width="267" src="images/divisionofNEW.GIF" border="0"></a></td> <td width="1" height="39"><spacer type="block" width="1" height="39"></td> </tr> <tr> <td width="624" colspan="6" valign="top" align="left" xpos="0" class="style3"> <table border="0" width="100%" bgcolor="black" cellspacing="0"> <tr> <td> <table border="0" width="100%" bgcolor="#99ffcc" cellspacing="0" cellpadding="4"> <tr> <td align="center"> <div align="left"> <a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> HOME</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> &#8226; <a href="articlesindex.html">ARTICLES</a> &#8226; <a href="books.html">BOOKS</a> &#8226; <a href="teflon.html"> THE </a><a href="teflon.html">TEFLON</a><a href="teflon.html"> REPORT</a> &#8226; <a href="mailto:letters@onlinecolumnist.com"> REACTIONS</a> &#8226; <a href="aboutdiscobolos.html">ABOUT DISCOBOLOS</a></strong></font></div> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr height="2"> <td width="133" height="2">&nbsp;</td> <td width="489" height="2576" colspan="3" rowspan="2" align="left" xpos="133" content valign="top" csheight="2573"> <p class="style4">&nbsp;</p> <p class="style4">Geithner in Hot Water</p> <p><b><font face="Arial,Geneva,Helvetica">by John M. Curtis</font></b><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b><a href="books.html"><br> </a></b></font><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b> (310) 204-8700</b></font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright Jan.. 8, 2010<br>All Rights Reserved. </i></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p> <bAbout the Author</u> <p class="MsoNormal"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span class="style7">C</span>ausing Presdient Barack Obama more embarrassment, Treasury Secretary Tim Geithner was back in the headlines for his role as New York Fed Chairman, telling American International Group [AIG] to withhold publicly which banks received billions from the Toxic Assets Relief Program bailout funds.<span style="mso-spacerun: yes">&nbsp; </span>By Dec. 24, 2008, after announcing Geithner was nominated for Treasury Secretary, AIG had received $182.3 billion in TARP funds.<span style="mso-spacerun: yes">&nbsp; </span>E-mails obtained by Rep. Darrell Issa (R-Calif.), ranking member of the House Oversight and Government Reform Committee, showed that attorneys for the New York Fed asked AIG to withhold names to banks to whom they made payments on  credit default swaps, insurance paid for failed derivative investments.<span style="mso-spacerun: yes">&nbsp; </span>Geithner decided in Nov. 2008 to repay Goldman Sachs and 12 other banks $62.1 billion in past due credit default swaps.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Federal Reserve Board Chairman Ben S. Bernanke played his cards close to the vest in late 2008, refusing to reveal the recipients of TARP funds, fearing panic among domestic and foreign investors.<span style="mso-spacerun: yes">&nbsp; </span> It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information, said Issa, a House Republican known for aggressive partisanship.<span style="mso-spacerun: yes">&nbsp; </span>Issa forgets that Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, also favored at the time withholding from the public the specifics related to disbursement of TARP money.<span style="mso-spacerun: yes">&nbsp; </span>Issa didn t object then to Paulson s secrecy, a personal friend of former AIG CEO Edward Liddy, a member of Goldman Sach s board.<span style="mso-spacerun: yes">&nbsp; </span>Liddy resigned May 22, 2009, when his conflict-of-interest became known publicly.<span style="mso-spacerun: yes">&nbsp; </span>Confidential e-mails also showed that Geithner asked AIG to pay back crippled banks in full.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Whether justified or not, Geithner still finds himself embroiled in another controversy, prompting strong denials from the Treasury Dept.<span style="mso-spacerun: yes">&nbsp; </span> It s been irresponsible, misleading and exhibited reckless disregard for the truth, said Geithner s counsel, Jake Siewert, Bill Clinton s last press secretary.<span style="mso-spacerun: yes">&nbsp; </span>Siewert s hyperbole reveals more problems for Geithner, exposed for his incestuous relationship with former Bush Treasury Secretary Hank Paulson.<span style="mso-spacerun: yes">&nbsp; </span>Before Geithner s confirmation [60-36] Jan. 26, 2009, he endured withering criticism for failing to pay taxes on self-employment income.<span style="mso-spacerun: yes">&nbsp; </span>Treasury General Counsel Thomas Baxter insisted Geithner was not privy to the Treasury Dept. e-mails asking AIG to withhold public information about delaying the names of investment banks receiving TARP funds.<span style="mso-spacerun: yes">&nbsp; </span>Treasury spokeswoman Meg Reily said  Geithner played no role in these decisions. <span style="mso-spacerun: yes">&nbsp; </span> </p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Treasury officials know that, regardless of what and when Geithner knew about the private e-mails to AIG, the buck stops with Cabinet secretaries.<span style="mso-spacerun: yes">&nbsp; </span>Whether Geithner recused himself or not, he s responsible for any and all major Treasury Dept. decisions.<span style="mso-spacerun: yes">&nbsp; </span>If Treasury asked AIG to withhold information, it s the Treasury Secretary that stands accountable.<span style="mso-spacerun: yes">&nbsp; </span>Insisting the e-mails  were not brought to [Geithner s] attention doesn t excuse secrecy.<span style="mso-spacerun: yes">&nbsp; </span>Taxpayers  deserve full and complete disclosure under our nation s securities laws, not the withholding of politically inconvenient information, said Issa.<span style="mso-spacerun: yes">&nbsp; </span>Geithner s no disclosure policy was a continuation of Bernanke s and Paulson s that sought to prevent investor panic and a  run-on-the-bank, a similar scenario following the 1929 stock market crash.<span style="mso-spacerun: yes">&nbsp; </span>Regardless of the motives, something fishy went on at the Fed and Treasury in 2008.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>When the Treasury and Fed decided to pull the plug on Lehman Bros. Sept. 14, 2008 the stock market went into a nosedive, losing nearly 50% of its value.<span style="mso-spacerun: yes">&nbsp; </span>Only six month earlier, Paulson bailed out investment bank Bear Stearns, letting it merge with J.P Morgan Chase. Geithner, who worked closely with Paulson, was Wall Street s pick for Treasury Secretary, despite unanswered questions about the extent of TARP payments from AIG to Goldman Sach s.<span style="mso-spacerun: yes">&nbsp; </span>Geithner s tight connection to Paulson and Paulson s close relationship to AIG CEO and Goldman Sachs board member Liddy, raised eyebrows about how Goldman Sachs profited from government bailouts.<span style="mso-spacerun: yes">&nbsp; </span> Geithner quickly approved sending billions in AIG s bailout money to Goldman Sachs, despite the investment bank s financial strength.<span style="mso-spacerun: yes">&nbsp; </span>Whether misinterpreted or not, recent e-mails don t help Geithner s credibility.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Whether or not Geithner knew about secret Treasury Dept. e-mails asking AIG to stay mum about naming banks that received bailout funds, it opens up a can of worms.<span style="mso-spacerun: yes">&nbsp; </span>No matter what Issa s motives, taxpayers have a right to have a full accounting of public funds, even where it embarrasses or hurts the reputation of prestigious financial firms.<span style="mso-spacerun: yes">&nbsp; </span>Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, expects the e-mails to help get to the bottom of AIG s relationship with certain investment banks, especially Goldman Sachs, where their former CEO Edward Liddy sat on the board.<span style="mso-spacerun: yes">&nbsp; </span>When Geithner testifies before Towns committee Jan. 18, he ll have a lot of explaining to do, especially why he thinks it s OK keep crucial information from the public eye.<span style="mso-spacerun: yes">&nbsp; </span>Having embarrassed Obama twice, Geithner remains on thin ice.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span class="style6">About the Author </span> </p> <p class="MsoNormal"> <b>John M. Curtis</b> writes politically neutral commentary analyzing spin in national and global news.<span style="mso-spacerun: yes">&nbsp; </span>He s editor of OnlineColumnist.com and author <i>of <a href="books.html">Dodging The Bullet</a></i> and <i><a href="books.html">Operation Charisma</a></i>.</p> <p class="MsoNormal"> &nbsp;</p> </td> <td width="1" height="2576" rowspan="2"></td> <td width="1" height="2"><spacer type="block" width="1" height="2"></td> </tr> <tr height="2574"> <td width="133" height="2574" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="1" height="2574"><spacer type="block" width="1" height="2574"></td> </tr> <tr height="1" cntrlrow> <td width="133" height="1"><spacer type="block" width="133" height="1"></td> <td width="7" height="1"><spacer type="block" width="7" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="300" height="1"><spacer type="block" width="300" height="1"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> Home</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> || <a href="articlesindex.html">Articles</a> || <a href="books.html">Books</a> || <a href="teflon.html">The Teflon Report</a> || <a href="mailto:letters@onlinecolumnist.com"> Reactions</a> || <a href="aboutdiscobolos.html">About Discobolos</a></strong></font> <div align="left"> <p><font size="1" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">This site designed, developed and hosted by the experts at</font><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"> <a href="http://www.cmeonline.net" target="_blank"><img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">©1999-2005 <a href="aboutdiscobolos.html"> Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>