Geithner Protected Banking Buddies At The Expense Of The Taxpayers
Can you impeach a Treasury Secretary? That’s the question Russ Roberts wants answered.
According to this Bloomberg article, Obama’s Treasury Secretary (and confessed tax cheat) Tim Geithner used taxpayer dollars to protect several of his New York banking buddies from losing money in the AIG fiasco.
The situation is a little hard to follow, but essentially when Geither was heading up the New York Federal Reserve he oversaw that organization’s take over of AIG. The New York Federal Reserve took on a 77.9% interest in AIG in exchange for opening an $85 billion credit line for the company. With the New York Fed then in the driver’s seat for AIG, Geithner then ordered AIG to pay back several New York banking firms 100% of their interest in the company despite AIG’s other creditors having to take as little as 40 cents on the dollar for their interest.
That move resulted in the taxpayers paying an additional $13 billion for the AIG bailout.
Now, setting aside for a moment the political debate over whether or not the federal government had any business taking over AIG and bailing it out in this manner, what’s clear is that Geithner used his authority as the head of the New York Federal Reserve to save some of his friends $13 billion at the expense of the US taxpayer.
And now he’s our Secretary of the Treasury.
Not only is the man a tax cheat, he’s a crooked banker to boot.
