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It looks now like American International Group (AIG), the big insurance concern that is 80% owned by the federal government, will dwarf Enron and the Madoff Ponzi scheme in corruption, particularly since the Treasury and Federal Reserve appear to be a part of a giant coverup. It now appears that the Fed influenced AIG to not reveal that a huge payment from the federal government went right out the back door to the likes of Goldman Sachs and major foreign banks that got paid 100 cents on the dollar when 20 cents would have been more than adequate. The Fed knew there would be a public outcry; AIG withheld the information until later.

It turns out that on Dec. 30, 2008, the Securities and Exchange Commission asked AIG why it had not provided information on $62 million of derivative transactions. This is the same information that the San Diego law firm of Aguirre, Morrison & Severson has been seeking. It is suing AIG in Los Angeles Superior Court, charging, among many things, that AIG funneled money from insurance operations to gamble in derivatives. The suit seeks to protect California policyholders. In May of last year, Mike Aguirre of the firm tried to get the documents under Freedom of Information Act guidelines. The Treasury would not cooperate. So in June, he sued in federal court in San Diego, where the case, which has been amended, is still pending. "The Treasury is hiding the ball," says Aguirre. He suspects that the collateral that AIG provided the government was bad. If so, that's a felony, he says.

On December 20, Frank Partnoy of the University of San Diego law school co-authored an op-ed in the New York Times saying, "AIG is was at the center of the web of bad business judgments, opaque financial derivatives, failed economics and political relations that set off the economic cataclysm of the past two years." Partnoy said that "a trove of e-mail messages still backed up on AIG servers," as well as a number of documents, should be made public. San Diego Congressman Darrell Issa released some emails between AIG lawyers and the New York Federal Reserve, in which Fed lawyers said that certain items should not be disclosed. Now there will be Congressional hearings that could be blockbusters.

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Comments

SurfPuppy619 Jan. 9, 2010 @ 5:50 p.m.

Well, if ANYOEN didn't think that AIG/Goldman Sachs was a scam, they do now-unless thye are alcking a brain.

Tim Geitner was leading the cover up. Hmmmmm, why would he do that??....Oh, because he is getting kick backs from his former (and future) employer!

I am getting more and more bent out of shape with what the Obama administration is doing. He has been in office over a year-which was how long I was going to give him to get the country going again before I started pointing out his mistakes.

Obama needs to put EVERYTHING else aside right now-immigration, healthcare, everything- until the engine that drives this country starts to run again.

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Burwell Jan. 9, 2010 @ 9:40 p.m.

I think Aguirre is using the FOIA lawsuit as leverage to force AIG to settle his case in Los Angeles Superior Court. If Aguirre convinces the Judge to uphold his FOIA suit, AIG and Treasury will likley offer a substantial financial settlement in the LA case to keep the records out of the public realm. The release of these records would ignite a public firestorm and lead to the appointment of a special prosecutor. Aguirre proves once again that he's an extremely cunning lawyer. I predict that he will obtain a substantial settlement and the FOIA records will not be released.

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Don Bauder Jan. 9, 2010 @ 10:42 p.m.

Response to post #1: When Obama hired Summers and Geithner, and Mary Schapiro at the SEC, I was crestfallen: I figured all the change talk was fraudulent. Summers was one leading the drive for financial deregulation in the 1990s: as much as anything, this led to the world's collapse. As head of the NY Fed, Geithner was a tool of Rubin and all the big firms, including Goldman Sachs. Schapiro is a captive of Wall Street, although she is nowhere near as bad as Cox, her predecessor, who was a complete whore. Obama is being led around by the nose by the same bunch of crooks that led Bush around by the proboscis. Best, Don Bauder

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Don Bauder Jan. 9, 2010 @ 10:47 p.m.

Response to post #2: Certainly, the timing is in Aguirre's favor. All the negative AIG publicity of recent days will make it harder for the judge to throw the case out, if she is so disposed. However, Aguirre thinks she is a good judge, and a fair one. The question is whether the word will come down from Washington to make sure the case doesn't get to a jury. AIG may be judgment-proof. My guess is that Aguirre wants to recover his costs, which must be considerable. Best, Don Bauder

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Fred Williams Jan. 9, 2010 @ 11:16 p.m.

Aguirre continues to do real public service for our country.

No wonder he's been so vilified by the corrupt elite.

I still like Mike!

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SurfPuppy619 Jan. 9, 2010 @ 11:49 p.m.

I just found the case on the docket......I hope Aguirre gets more info, and get it out in public.

I am very disappointed with the way Obama is turning out-he said he was going to make the gov more transparent, and things like this maker him look like Bush the 3rd.

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Don Bauder Jan. 10, 2010 @ 7:43 a.m.

Response to post #5: Vilification is the price of countering the establishment in San Diego. Think Peter Navarro, Donna Frye, Bruce Henderson, Diann Shipione, Aguirre. All got smeared for committing the grievous sin of making sense, and wanting to eliminate the establishment corruption. Who will come forward now? It's like wishing the guillotine on one's self. Who will oppose the ridiculous convention center expansion, new civic center, and subsidized stadium for the Chargers? It may have to be a bankruptcy judge. Best, Don Bauder

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Don Bauder Jan. 10, 2010 @ 7:48 a.m.

Response to post #6: The Reader, of course, will follow the AIG fraud and coverup. The New York Times is doing an excellent job on the story, and has been following Aguirre's case in L.A. superior court. I, too, am extremely disappointed in Obama. As Jim Welsh, Carlsbad money manager said to me, "Obama is being led around by the nose by the same people who led Bush around by the nose." So true. Best, Don Bauder

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a2zresource Jan. 10, 2010 @ 11:30 a.m.

I've been reading Sun Tzu's Art of War and it's commentaries over and over for decades. Mr. Aguirre's firm stands to gain a lot more by taking its case to trial for final judgment rather than settling before opening statements. I am sure that lawyers may argue otherwise (I'm not one by a long shot), but evidence of felonious behavior on the part of AIG appears to be worth far more politically than its weight in gold, even at $1.1K+ per ounce.

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Don Bauder Jan. 10, 2010 @ 1:40 p.m.

Response to post #9: At this point, it appears that some people who have been involved in the AIG fiasco could face criminal charges -- if the prosecution system were honest, that is. Unfortunately, it isn't honest. Best, Don Bauder

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Btok Jan. 11, 2010 @ 8:20 p.m.

PART 1 http://www.infowars.com/bankergate-emails-expose-criminal-financial-dictatorship-at-work/ Steve Watson Prisonplanet.com
Monday, Jan 11, 2010 Explosive emails released last week could see Treasury secretary Timothy Geithner become embroiled in criminal charges for his role in a cover up that exposes the monumental criminality behind the $182.3 billion bailout of American International Group Inc. In November and December 2008, The Federal Reserve Bank of New York instructed the bailed out AIG to hide from the public details regarding payments the insurance giant made to banks, including Goldman Sachs Group Inc. and Societe Generale SA. Using Fed secured taxpayer bailout money, AIG paid several banks 100 percent of the face value of credit-default swaps, as other financial institutions were negotiating deep discounts for the unregulated paper assets that do not have to be backed by cash. The decision to pay the banks in full may have cost AIG, and therefore taxpayers, at least $13 billion over the odds. The “backdoor bailout” of the banks, as it has been dubbed was exposed in March 2009 after the SEC challenged AIG’s filing, however, e-mails obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee, have re ignited the situation as they conclusively expose a collusion between AIG and the Fed to deceive the public. The e-mails between company and regulator, released last Thursday, show that The New York Fed crossed out reference to the payments and that AIG also omitted the details when the Securities and Exchange Commission filing was made public on Dec. 24, 2008. The emails, the content of which are highlighted

PART 2 http://www.infowars.com/bankergate-emails-expose-criminal-financial-dictatorship-at-work/

in this Bloomberg News article, also show that the Fed wanted numerous other details about the AIG bailout withheld or delayed from public oversight. “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” Despite denials from the Treasury and the New York Fed that Geithner was involved in the scandal, as the President of the New York Fed at the time, his head now rests firmly on the chopping block where he awaits his fate. Geithner’s extensive connections to Goldman Sachs also raise serious Questions, given that the investment bank directly profited from the AIG payments. Paulson rammed through the bailout of AIG with threats of financial armageddon and physical martial law, claiming he “felt the pain of AIG”, comments for which he was slammed by Republican Congressman Cliff Stearns earlier this year.

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Btok Jan. 11, 2010 @ 8:21 p.m.

PART 3 http://www.infowars.com/bankergate-emails-expose-criminal-financial-dictatorship-at-work/

AIG’s outstanding debts to Goldman Sachs meant that $13 billion of the money handed over to AIG by Paulson went directly to Goldman Sachs.Meanwhile, Bear Stearns and Lehman Brothers — both investment banks in direct competition with Goldman Sachs — were not bailed out when bad debt forced them to cease operating under the same circumstances as AIG. Congressman Stearns pressed Paulson on his conflicts of interest, stating, “Isn’t there some point where you say hey, I’ve got a conflict of interest here, you don’t feel any kind of scintilla of ethics on this thing at all?” Paulson responded by claiming that he got a waiver from the ethics agreement. Paulson’s appointment, at the height of the financial crisis, of ex-Goldman Sachs executive Neel Kashkari to oversee the distribution of bailout monies also highlights the vast conflict of interest surrounding this scandal. As the New York Times reported earlier this year, Goldman Sachs effectively bailed itself out. Since that time the bank has been making record profits on trading and now completely dominates the program trading market. This blatantly criminal activity has led to Goldman being labeled “Financial Terrorists” by analysts.Even Rolling Stone magazine has exposed Goldman Sachs’ persistent role in steering and manipulating the economy over the last century. At the time of the bailout we warned that the so called financial saviours represented nothing more than the old guard of the corporate elite, the very people responsible for the financial crisis in the first instance. Judge Andrew Napolitano, appearing on Shepard Smith’s Fox News show last week, stated that he believes Geithner could face a criminal probe. http://www.infowars.com/bankergate-emails-expose-criminal-financial-dictatorship-at-work/

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SurfPuppy619 Jan. 11, 2010 @ 9:13 p.m.

Paying 100 cents on the dollar, instead of letting Goldman go BK, was a crime-no doubt about it.

Here is a good article on Goldman Sachs;

http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine/1

One more;

http://www.rollingstone.com/politics/story/26793903/the_big_takeover

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Don Bauder Jan. 11, 2010 @ 9:32 p.m.

Response to poste #11: Paulson had a good reason to see the AIG monkey business concealed. The fat slug went to Goldman Sachs, which Paulson used to head. Geithner's excuse that he wasn't involved in the AIG matter is weak. If, as our leaders claim, that money had to go out the back door at 100 cents on the dollar to keep the system from collapsing, then let's hear the grim details -- everything. Was Goldman Sachs on the brink of insolvency then? Tell us. Best, Don Bauder

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Don Bauder Jan. 11, 2010 @ 9:36 p.m.

Response to post #12: The public should demand a complete investigation. If criminal prosecution is warranted, there should be no reason to stop it, but I am not sanguine about that. The American people have to get Wall Street out of their pockets. See my column that comes out Wed.-Thurs. Best, Don Bauder

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Don Bauder Jan. 11, 2010 @ 9:37 p.m.

Response to post #13: That Rolling Stone article is an eye-opener. Best, Don Bauder

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SurfPuppy619 Jan. 12, 2010 @ 8:52 a.m.

The biggest part of the problem is that former Goldman Sachs employees have virtually penetrated every nook and cranny of the government. It is almost like THEY are running the government.

What needs to be done with Goldman-and ALL Big Business-is they need to stop allowing them to merge, and merge and merge until there is no competition left-or if there is more than one major player in any given industry it just a handful making an oligopoly (Big Oil and Big Investment Banks being the most obvious). They need to bust up the major companies where the industry has limited competition, bust them into 30 or 40 smaller firms, just like the gov did to Standard Oil back in 1909.

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Don Bauder Jan. 12, 2010 @ 1:59 p.m.

Response to post #17: I agree. There should be no such thing as "too big to fail" or "too interconnected to fail." We need another trust-busting Teddy Roosevelt. Best, Don Bauder

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MondoGrapes Jan. 13, 2010 @ 7:31 a.m.

In regards to the Rolling Stone article, Matt Taibbi has been doing wonderful work uncovering the shenanigans behind the bubble and resulting financial collapse and the speculation in commodities that drove the price of oil to record highs even as demand was dropping (all of which Goldman had a hand in). His blog, http://trueslant.com/matttaibbi, is required reading on these subjects (along with Mr. Bauder's). He did a great piece about how the runs on Bear Stearns and Lehman Brothers were basically carried out like Mafia hits and left Goldman without any real competition whatsoever (http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle/).

I sincerely hope that Mr. Aguirre forgoes any deal in his case and sees that by going to trial, he has an incredible opportunity to become a true hero by dragging these fiends into the light. Maybe then we'd see some real outrage. I'm still kind of flabbergasted at how so many either don't know, don't care, or simply shrug their shoulders at what has to be the biggest mugging in American history.

By the way Don, long-time reader, first time poster here. Love your work.

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Don Bauder Jan. 13, 2010 @ 10:10 a.m.

Response to post #19: The committee investigating the financial collapse has had Blankfein, Dimon, Mack, Moynihan etc. before Congress today. I have watched some of it. The bankers took an aggressive (and of course disingenuous) position from the outset, and the committee members capitulated and began throwing softball questions (other than Angelides, who was tough.) It has been disappointing. The Wall Street crooks may bully their way through this one. Glad to see you making a post. Please make more. You see the big picture. Best, Don Bauder

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SurfPuppy619 Jan. 14, 2010 @ 12:50 p.m.

In regards to the Rolling Stone article, Matt Taibbi has been doing wonderful work uncovering the shenanigans behind the bubble and resulting financial collapse and the speculation in commodities that drove the price of oil to record highs even as demand was dropping (all of which Goldman had a hand in). His blog, http://trueslant.com/matttaibbi, is required reading on these subjects (along with Mr. Bauder's).

Matt Taibbi has caused so much damage to Goldman Sachs reputation that now Goldman is running a huge smear campaign against him.

This is exactly what happened to David Cay Johnston also-you start throwing the fast ball strikes at these guys and they run for cover and then try to discredit you by sliming you.

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Don Bauder Jan. 14, 2010 @ 3:43 p.m.

Response to post #21: I have seen a hit job or two against Taibbi, but I have seen no invective directed at David Cay Johnston. Can you give me some examples? Johnston's work is outstanding. Best, Don Bauder

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Don Bauder Jan. 15, 2010 @ 7:32 a.m.

Response to post #23: Because Johnston has exposed how the tax system fattens the rich and steals from the poor, it is inevitable that the rich would attack him personally. I had not seen this before. Best, Don Bauder

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