Bloomberg reports that former Treasury Secretary Henry Paulson was “asked” to join current Treasury Secretary Timothy Geithner to testify before the House Oversight and Government Reform Committee panel looking at the pass through payments made to AIG trading partners such as Goldman Sachs and SocGen.

Bloomberg:

“Paulson was invited to a Jan. 27 hearing set by Edolphus Towns, chairman of the House Oversight and Government Reform Committee, about the decision to fully reimburse AIG’s bank counterparties for $62.1 billion in derivatives. Stephen Friedman, the former Federal Reserve Bank of New York chairman who serves on the board of Goldman Sachs Group Inc., was also asked to appear, Towns said in a statement yesterday.

“Chairman Towns is well aware of the fact that President Bush’s Treasury secretary orchestrated this bailout,” Jenny Rosenberg, a spokeswoman for the New York Democrat, said in an e-mail explaining why Paulson was invited.

The request widens the probe into what lawmakers have called a “backdoor bailout” of banks that benefited from the $182.3 billion U.S. rescue of AIG. Geithner, who ran the New York Fed when AIG was saved in 2008, agreed to testify before the committee after Darrell Issa, a California Republican, released e-mails last week showing that the New York Fed asked AIG to withhold data about bank payments.”

One question: Why not just subpoena him?

>

Source:
Paulson Asked to Testify at AIG Bailout Hearing With Geithner
Hugh Son
Bloomberg, Jan. 16 2010
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4kpRjxnjM4I&

Category: Bailouts, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

35 Responses to “Congress “Invites” Paulson to Testify at AIG Hearing”

  1. ToNYC says:

    I believe that ignoring or denying an “invitation” is a gentleman’s way of strongly advising a particular
    action to a former unindicted person of high rank, while not precluding in the slightest an ensuing subpoena. The wheels of justice turn slowly, but turn they will, inexorably, if enough people will it.

  2. torrie-amos says:

    stupid is as stupid does, and they do it again

    i’ve only seen paulson talk a half dozen times, yet, even I know the guy never ever goes off script and will give the same answer every time no matter how nuanced or different the question is

    i half believe he was the mastermind of the whole thing, and since he was gone in 4 months, he intentionaly staid out of the details and gave broad directives of,,,,,,,,,it’s up too you guys, meaning ben and tim

    he wanted the money, open to all, got the money open too all, wanted full control, got bs constraints, which he knew were meaningless, and he’d be long gone before any of them meant anything, he wanted the money and got it, that’s his whole story, probably not much more and not much less

  3. Marcus Aurelius says:

    Subpoena him? Why the hell not indict him? Why not bring him before the Congress in chains? This shit has gotten way out of hand. Allowing criminals to keep a only a portion of the profits derived from their criminal enterprise – as opposed to seizing ALL of their assets and putting them on track to harsh prison time – is not exactly punishment.

  4. Mysticdog says:

    It will never happen. Once people start getting locked up, they know it wont ever stop until everyone involved is held accountable. That would be an awful lot of people. Rich people. Important people. People to big to fail. It would be awesome to see Paulson go “A Few Good Men” in the hearing though.

  5. Marcus Aurelius says:

    An awful lot of people? How many? 5,0000? I doubt it. Fuck ‘em. I don’t give a damn how many of them there are — lock their criminal asses up.

  6. wally says:

    What a bunch of nutless wonders we have elected.

  7. bsneath says:

    I find it difficult to believe Blankfein when he said he was not involved in the discussions or decisions to discount or repay AIG’s counterparties at 100 cents on the dollar. I suspect Paulson must testify under oath in order to learn the truth on that matter.

    The cynic in me wonders if Paulson is not going to be subpoenaed because he would be under oath and it was he who had the direct conversations and made the decisions whereas Geithner can state plausible deniability.

  8. Tarkus says:

    Didn’t Paulson try to slip in immunity from prosecution for himself into the TARP legislation? Now, why in the world would he have done something like that when he was saving the economy for The American People?
    Of course, Paulson was running a big financial company while mis-rated/mis-priced CDO’s where being dumped onto the world. But then, he has said that he never paid attention/understood that side of the business while he was CEO. Too bad nobody in the company knew how to run PowerPoint and make a 30 minute presentation for him. They may be the best and brightest, but just not at PowerPoint.
    So Paulson can say “I’m the best and brightest, but I didn’t know squat. Please don’t prosecute me for fraud.”

  9. call me ahab says:

    invited him?

    now that’s funny- like it’s a cocktail party-

    why would he go unless forced to do so?

    I think Wally has it right-

    “What a bunch of nutless wonders we have elected.”

  10. The Curmudgeon says:

    Why not just subpoena him?

    He told them they’d regret it if they did. He agreed to be “invited” so they could pretend through their dog and pony hearings to be holding his feet to the fire. But no further. Or they’d have to pay. And he’s from Goldman, who as we all have been informed, is about the business of doing “God’s work”. You don’t fuck with God, or in this case, a Goldman alum, same difference in their eyes.

  11. jpm says:

    One question: Why not just subpoena him?

    I think the right legal answer is: He would then almost be obligated to invoke executive privilege.

    I agree with the above sentiment tho: Why not just bring him in chains?

  12. bman says:

    You guys are wimps. Chop his head off, stick the bloody thing on a spear, plant the spear squarely behind the chairman and then invite some more.

  13. dss says:

    The real question is if he does appear will he be under oath, or will it be one of those fake hearings where he can refuse to answer the question?

    If he is issued a subpoena then I assume he will be under oath. Don’t know about an invitation.

    Is this appearance going to be a fact finding or adversarial ? Or just a big dog and pony show?

  14. clawback says:

    Let’s not forget that Steve Friedman has also been “invited.” As chair of the NY Fed, he, and not Geithner, was ostensibly in charge of the back-door bailouts at par, and of the attempted cover-up.

    It’s interesting that the bailout apologists who have suddenly come out of the woodwork since criticism of the par payouts has gone mainstream (see Grunwald in Time) continue to suggest or imply that all of these back-door bailouts were made during the chaos and “panic” of mid-September. To the contrary, many of these decisions were made during DECEMBER. Was there really a “panic” going on in December like the one that we had in September?

    Even if you argue that the same panic prevailed, then why, pray tell, did FRBNY chairman Stephen Friedman (who sat concurrently on the GS BOD) take time away from panicking in order to make not one, but two purchases of Goldman Sachs stock — BEFORE it was publicly known that AIG would make good on their obligations to companies like Goldman who had c 15B in exposure to AIG? And why, pray tell, would Treasury officials bother to cover up their nasties if there was so much doggone panic going on? Further, why would the SEC still be colluding with Treasury in an attempt to continue the cover-up until 2018?

    This doesn’t sound like mistakes or decisions made “in the heat of the moment,” but more like a deliberate attempt to cover up actions they knew were wrong.

    We’ll see, but the fact that Friedman has neither been indicted or investigated by the SEC is a travesty. Wake up, Ms. Schapiro!

  15. The Window Washer says:

    Why not just subpoena him?

    I was going to make a smart ass comment here but, they can subpoena him later. If they get every single witness all lawyered up they will run out of time before anyone even shows up. This way you get the ball rolling for election season with some sound bites. Once you start to find something you can bring them back with a subpoena. Stating “Once you start to find something” sounds funny but they can only work on what the committee “finds”.
    Election
    Election
    Election

  16. The Window Washer says:

    Paulson will show up if invited by the way. Just watch.

  17. bman says:

    I hope he shows up on a spear.

  18. Robespierre says:

    Interesting thing is that the only bi-partisan thing going on in congress is to provide cover/protection to these bankers. Such harmonious agreement between the two parties you have to love it.

  19. Ponchovilla says:

    Golly! Gee whiz! Holy Cow!
    Henry Paulson. How could he possibly have anything to do with NY Fed actions.? If he testifies:
    1. No one will be able to decipher what he says
    2. At best he may have suggested a suggestion to suggest something but only on a voluntary basis
    3. He did not use email because he did not embrace the non personal interactions.

    Any involvement by Henry Paulson in NY FED business is purely coincidental and non binding.

    HO HO HO
    Regards from Santa Claus and Tiger Woods

  20. Marcus Aurelius says:

    Is there a legitimate “right” to legal representation when appearing before Congress, or is it tradition?

  21. bsneath says:

    clawback Says:

    “Even if you argue that the same panic prevailed, then why, pray tell, did FRBNY chairman Stephen Friedman (who sat concurrently on the GS BOD) take time away from panicking in order to make not one, but two purchases of Goldman Sachs stock — BEFORE it was publicly known that AIG would make good on their obligations to companies like Goldman who had c 15B in exposure to AIG? And why, pray tell, would Treasury officials bother to cover up their nasties if there was so much doggone panic going on? Further, why would the SEC still be colluding with Treasury in an attempt to continue the cover-up until 2018?”

    Question: Friedman’s actions were no doubt unethical. but wouldn’t they also be illegal? It sounds like insider trading by a public official.

  22. bobmitchell says:

    MA, I don’t know about that in particular, but they can always….

    http://www.pp2g.tv/vYH1-Y3U_.aspx

  23. The Window Washer says:

    Bob,

    Thanks for that link, I think of it every time one of these things comes up. The whole skit is a great one, the police taking down the golden is classic.

  24. bobmitchell says:

    WW, I said on another blog we need more dead golden retrievers.

  25. Mannwich says:

    @bobmitchell: That is hysterical. What a brilliant show.

  26. Space_Cowboy_NW says:

    “bobmitchell” ..SPOT ON!!

    More talent (and thought) in that sketch than a collective years worth of (all) network late night tv.

  27. Tarkus says:

    “We’ll see, but the fact that Friedman has neither been indicted or investigated by the SEC is a travesty. Wake up, Ms. Schapiro!”

    Um…unfortunately, Ms. Schapiro IS awake. Whether there’s actually any thought up in her belfry that hasn’t been put there by a Wall St company is the question. And also unfortunately, her “all deliberate speed” inaction on the rampant fraud that a blind man could smell says…’no’.

  28. clawback says:

    Question: Friedman’s actions were no doubt unethical. but wouldn’t they also be illegal? It sounds like insider trading by a public official.

    Um, yeah. Just a little. Again, is Mary Schapiro asleep or in cahoots? (Or, alternatively, is it that there’s nothing going on up in the old belfry?)

  29. Marcus Aurelius says:

    Hey, bobmitchell:

    Thanks for the links. That’s some hilarious stuff. I miss Chappelle.

  30. KLeBrun says:

    “Recessions happen every 5 to 7 years. We thought the real estate market would go up forever.” I was laughing so hard I forgot which idiot said that to the congressional oversight committee.

    45 years in the real estate industry and I NEVER saw the real estat market go up in the midst of a serious recession. NEVER, NEVER, NEVER!

    These guys got their MBAs out of a box of crackerjacks.

  31. bman says:

    Some questions are just above the likes of us untalented low paid formerly middle class folks. In cases like this the only solution is to kill them all and let god sort them out.

  32. sasa123 says:

    The longer you look at the Goldman conspiracy theories, the longer you will deny the real cause of the crisis. Fredy and Fanny are the engines of the housing bubble. Investment banks merely a lube on cogs somewhere in the middle. F & F issued 10 times more mortgages than balance sheet of all investment banks combined. Of course government will not question they own housing policy.

  33. clawback says:

    Steve Friedman’s insider trading is not a Goldman conspiracy theory:
    http://dailybail.com/home/is-stephen-friedman-guilty-of-insider-trading.html