Geithner’s Fed told AIG to hide “backdoor bailout”

http://www.infowars.com/geithner’s-fed-told-aig-to-hide-“backdoor-bailout”/

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Michael Hampton
Homeland Stupidity
January 10, 2010

The Federal Reserve Bank of New York, during its $180 billion bailout of American International Group, Inc., instructed AIG to omit details of its purchase of certain toxic assets from a December 24, 2008, Securities and Exchange Commission filing, according to e-mails between the company and the Fed released Thursday.

Using bailout money provided by the Fed, AIG paid a number of banks 100 percent of the face value of credit-default swaps, contracts tied to subprime home loans, at a time when other institutions were negotiating deep discounts for the paper. The names of the banks were also omitted from the SEC filing.

The information was finally disclosed in March 2009 after the SEC challenged AIG’s filing, prompting lawmakers and analysts to call the transactions a “backdoor bailout” of the banks. Topping the list of banks which benefited from the backdoor bailout of their toxic paper were Goldman Sachs and Societe Generale SA.

The e-mails, released Thursday by Rep. Darrell Issa (R-Calif.), ranking member of the House Oversight and Government Reform Committee, show the Fed wanted a number of other details about the AIG bailout withheld or their disclosures delayed.

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