Fed knew of AIG bonuses, failed to tell Obama

[kpete]

Source: Raw Story

Fed knew of AIG bonuses, failed to tell Obama
Agence France-Presse
Published: Thursday March 19, 2009

WASHINGTON (AFP) - US Federal Reserve officials knew about the controversial AIG bonuses but did not tell Treasury or White House officials for months, the Washington Post reported Thursday.

The American International Group informed the Fed three months ago that it would pay 165 million dollars by March 15 to employees in their Financial Products unit, the Post reported, citing government and company officials.

The bonuses were doled out to the AIG division at the heart of the company's near collapse and whose intricate dealings with banks worldwide helped trigger the global financial crisis.

Treasury Secretary Timothy Geithner told the Post that he had not been aware of the size of the bonuses and the timing of the payments.

Read more: http://rawstory.com/news/2008/Fed_knew_of_AIG_bonuses_failed_0319.html

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Report: Treasury Knew About AIG Bonuses Earlier Than Obama Administration Claims
By Elana Schor - March 18, 2009, 6:07PM
http://tpmdc.talkingpointsmemo.com/2009/03/report-treasury-knew-about-aig-bonuses-earlier-than-geithner-claims.php

[natrat]

1. sure, did they tell them about the billions being scammed

[WannaJumpMyScooter]

2. That headline is wrong, then

the Fed failed to tell Treasury AND the WH

[MADem]

9. It's totally wrong. The FED knew three months ago, Obama wasn't even the President.

They didn't tell anyone until a few days before the bonuses were to be paid.

I posted a link to a WAPO "How it happened" article below.

[Donnachaidh]

18. more importantly -- WHO was the Fed Chair at that point?

Turbo Tax Timmy needs to GO.

[MADem]

21. Timmy was NOT the Fed Chair. Ben Bernanke was.

And he still is.

[oviedodem]

3. Good, and since the Fed reserve is controlled by Congress let them deal with it.

[burythehatchet]

4. The Fed is controlled by congress? Please tell me more.

[w4rma]

16. The Fed is a privately owned entity. (nt)

[Connie_Corleone]

5. The headline needs to be changed to the Fed...not treasury.

[kpete]

10. rs had 2 titles

i have changed it, because i agree with you, thanks, kp

[dkf]

6. TARP is Treasury and TALF is the Fed.

AIG is getting funds from both.

Frankly if the Fed knew and Treasury didn't, that means the Fed is more clued in than Treasury is.

What is beginning to really bother me is that Treasury didn't have a clue. That means there is unsatisfactory oversight on the Treasury side and maybe they are incapable of overseeing things as it stands.

We really need to get Treasury up to speed. I don't see how this is anything less than priority number one.

[lamp_shade]

7. Please correct your title. "Fed failed to tell WH and Treasury".

[MADem]

8. How it happened. NOTE: Obama was not the PRESIDENT three months ago.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/18/AR2009031804210.html

Federal Reserve officials knew for months about bonuses at American International Group but failed to tell the Obama administration, according to government and company officials, exposing problems in a relationship that is vital to addressing the financial crisis.

As pressure mounted on AIG employees to return the bonuses, new details emerged yesterday about what the Fed, the Treasury Department and the White House knew regarding the payments and when. AIG executives said the Fed was informed three months ago by the company that it would pay $165 million by March 15 to employees working at its most troubled division. The Treasury and White House said they learned of the payments from Fed officials only days before they were due.

Close coordination between the Fed and the administration is now more important than ever as they near the launch of two signature programs to rescue the financial system, which together could reach $2 trillion and are aimed at reviving consumer lending and purchasing soured assets and loans from ailing banks.

Treasury Secretary Timothy F. Geithner, a central figure in the decision to bail out AIG last fall as president of the Federal Reserve Bank of New York, said in an interview yesterday that he had not been aware of the size of the bonuses and the timing of the payments.

"I was stunned when I learned how bad this was on Tuesday ," Geithner said. "I shouldn't have been in that position, but it's my responsibility and I accept that."

[Triana]

11. Ding! Ding! Ding! There's the rub, folks, right there. n/t

[wackywaggin]

13. Exactly!!

Obama was not even acting president then. He was not sworn in until January 20.

[MilesColtrane]

12. Obama needs to start getting more competent people sitting on the Board of Governors...

..of the Fed.

He can start by nominating Robert Reich for the current vacancy, and by reviewing the qualifications of the other board members to see who would be a better option to be Chairman over Bernanke.

[Marie26]

14. But the Treasury Dept. obviously knew by Feb.

And I have to think that Obama knew then as well.

[Kalyan]

15. Mr. Ben Bernanke - please be available for a senate grilling on Monday next week

[tbyg52]

17. So, once again, the corporations are guarding the corporations

and leaving the government out of the loop. (Except when they want money, of course.)

[Gin]

19. question.....Geithner was still with the NY Fed at the time....so...he must have known

if Obama was not sworn in...then Geithner wasn't nominated yet. Is that correct????

[tbyg52]

20. Huh? I think you're either criticizing me or crediting me with more smarts than *I* have

and I'm not smart enough to be sure which....!

I guess I could have been clearer - I was referring to the Fed (which is *not* a government entity, right?) keeping the actual government entities out of the loop, apparently. Which sounds like business as usual to me.

[MADem]

22. He has stated, plainly, that he did not know when he was with the NY Fed, and didn't know

when he was Treasury Sec until recently. He says it falls on him, though, and he's accountable for it.

[JCMach1]

23. Bernanke should resign...!

This is a travesty...

And maybe Geithner too

[Naipes]

24. The initial bailout was approved in September of 2008...

During the Bush administration, before the election! No?

This is the same company that got 85 billion in Sept of 2008 and immediately afterward, company execs went to some custom vacation resort.

People are surprised that these guys are assholes?

wtf?


Hmmm... The Fed vs. the Treasury.... it's all so confusing. I'd like to delete this post, but I don't know how :-( Oh well.

[guruoo]

25. Obama set the bait...

and the sharks took it.

[crankmob]

26. why would they tell him? it's private corporation that doesn't have to answer to the US government..

technically..

[tbyg52]

27. Bingo. By me, that would be a problem. nt

[Igel]

28. What Geithner didn't say is crucial.

He wasn't aware of the size. He wasn't aware of the timing.

He didn't say he wasn't aware of the bonuses.

Since they're small in the grand scheme of things--less than 0.1% of the bail-out money so far, they're not just a big deal. When the earmarks in the recent omnibus budget bill were what--4% of the total--it was judged a trivial matter, not worth even thinking about. 4%, trivial; 0.1%, earthshaking.

Are we all homeopaths now?