Probes into secrecy and pay offs to staff who quit over pay
The New York Federal Reserve Bank actively worked with bailed out insurer AIG to build a case against disclosing details of AIG's payments to banks just days after the insurer considered making them public, Reuters reports
NY Fed lawyers asked that AIG maintain a "confidential treatment request" from the Securities and Exchange Commission (SEC), according to emails provided by representative Darrell Issa.
The emails question the role of Treasury Secretary Timothy Geithner, who ran the New York Fed at the time of the AIG bailout and the insurer's payment of some $62.1bn to banks to liquidate credit default swaps it had sold to them.
Paulson may appear too
Geithner is among those due to testify on the AIG payments and efforts to limit public disclosures about them at a 27 January hearing of the House of Representatives Oversight and Government Reform Committee.
Former Treasury Secretary Henry Paulson also has been asked to appear before the panel.
Issa, a California Republican, said the latest emails show that the Fed had a much more direct role than previously thought in determining what to disclose and what to keep confidential regarding the payments.
Why the secrecy?
"The underlying question that must be answered is why all the secrecy?" Issa said. "The ultimate goal of this investigation is to get the complete picture of who played what role in crafting the counterparty deal and keeping it out of public light in an effort to delay inevitable scrutiny."
Bloomberg added that AIG said in a draft of a regulatory filing that theit paid banks 100 cents on the dollar and the NY Fed crossed that and AIG excluded it when the filing was made public.
Kelly’s payoff
In a separate story Reuters reported Senator Chuck Grassley has written to pay czar Kenneth Feinberg asking why Anastasia Kelly, was given a pay off when she quite AIG over pay cuts.
Grassley said severance packages are for involuntary separations, not willing exits. "For me, and I am sure for taxpayers across America, the situation as reported surrounding Ms. Kelly and her severance is deeply troubling news," Grassley, an Iowa Republican, said.
News reports have put Kelly's severance package at between $2.8m and $3.8m, Grassley said.
He asked for Feinberg to provide Kelly's employee history, her salary information, a copy of the severance plan, and an explanation of any government attempts to modify the plan.
