[StBernard] Report Says Geithner Risked More Taxpayer Money Than Necessary

[Westley Annis]

Dear  Friend,


	

I want to draw your  attention to a new and deeply disturbing report from
the special inspector  general for the bailout  program.

	

In the report
<http://www.sigtarp.gov/reports/audit/2009/Factors_Affecting_Efforts_to_Limi
t_Payments_to_AIG_Counterparties.pdf> , Special Inspector General Neil
Barofsky examined the bailout of AIG and the factors affecting  efforts to
limit payments to the people AIG owed money  to.  The report criticizes The
Federal Reserve Bank of New York,  then headed by current Treasury Secretary
Tim Geithner, for its decision to  bail out the troubled insurance company
by covering its client's losses. This  decision resulted in tens of billions
of taxpayer dollars going to overseas  banks.

	

Barofsky writes that, "there is no question that the effect of FRBNY's
decisions - indeed, the very design of the federal assistance to AIG - was
that  tens of billions of dollars of Government money was funneled
inexorably and  directly to AIG's counterparties." Worse, the report
continues, Geithner and  the Federal Reserve Bank of New York's "negotiating
strategy to pursue concessions from counterparties offered  little
opportunity for success, even in light of the willingness of one
counterparty to agree to concessions." 

	

One thing is clear, because of the decisions of the Federal Reserve Bank  of
New York, the taxpayers are on the hook for billions of dollars more than
they should be. 

	

As the Senate  considers regulation of the financial sector, rest assured I
will continue fighting  to put an end to bailouts and the broken philosophy
of "too big to fail" once  and for all. 


Sincerely,
David Vitter
U.S.  Senator