January 10, 2010
The chairman of the House oversight committee turned the spotlight Friday once again on the government’s much-maligned bailout of American International Group, saying he would ask Treasury Secretary Timothy F. Geithner to testify about whether company executives were told to withhold key details about how they were spending taxpayer money.
Rep. Edolphus Towns (D-N.Y.), chairman of the House Committee on Oversight and Government Reform, said he will hold a hearing later this month to examine the Federal Reserve Bank of New York’s role in advising AIG to limit its disclosures about billions of dollars it paid to other firms during the height of the financial crisis. Geithner was head of the New York Fed at the time.
“More than one year after the first federal bailout of AIG, the American people continue to question where their tax dollars were really sent when the government rescued this company,” Towns said in a statement. “I continue to believe that a comprehensive review of the rise and fall of AIG and the involvement of counterparties can provide a useful vehicle to understanding how inadequate regulations, cheap money, risky business deals, and in some instances, corruption led to the current economic crisis.”
He called for the hearing after the release this week of e-mails showing that the New York Fed had asked AIG to refrain from disclosing details about payments it had made to trading partners in the wake of its $85 billion initial federal bailout in late 2008.