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AIG Cover-Up: SIGTARP Barofsky Hints At Criminal Charges Against The New York Fed



By now, you've likely seen the Bloomberg profile/interview with TARP Inspector General Neil Barofsky published yesterday morning.  The juicy quote among many was the following:

Barofsky says the question of whether the New York Fed engaged in a coverup will result in some sort of action.

“We’re either going to have criminal or civil charges against individuals or we’re going to have a report,” Barofsky says. “This is too important for us not to share our findings.”

He won’t say whether the investigation is targeting Geithner personally.

I contacted Barofsky's office yesterday morning to ask about a timeline for charges, and they had no comment.  When I asked if something would happen in 2010, I was told "yes."

How real is the possibility that NY Fed Chairman Stephen Friedman or NY Fed President Tim Geithner will be charged? 

It's not out of the question.  Barofsky has a history of fearless prosecution.  He was the target of a kidnapping/assassination attempt by Colombian druglords in 2005 -- detailed in the Bloomberg story.  So if he's got a case against either, he will probably file.  That said, insider trading charges against Friedman would normally be an SEC investigation.  Maybe that's why he said the following to Bloomberg:

“I’ve been in contact with the SEC,” he told the committee. “We’re going to coordinate with them, but we’re going to lead the charge. We’re going to review these transactions.”

Don't forget that Barofsky has criticized Geithner by name in multiple SIGTARP reports as well as in Congressional testimony regarding his handling of the AIG bailout while at the FRBNY.  So again, it would not shock me to see charges filed. 

The Bloomberg story is highly recommended reading.  It's full of great quotes and anecdotes not mentioned here.   Such as the following:

A Democrat named by a Republican president, Barofsky says missteps by both the George W. Bush and Barack Obama administrations are to blame for TARP’s failures.

“There’s a reason there are Tea Partiers out there, and when you look at it, anger at the bailout is one of the first things they talk about,” says Barofsky, referring to the anti- Obama political movement. “This Treasury Department and the previous Treasury Department bear some of the responsibility for not being straightforward with the American people.”

Barofsky criticized Geithner’s predecessor, Paulson, in an October 2009 report, saying Paulson publicly described the initial nine TARP bank recipients as healthy when he knew that at least one of them risked failure.

Barofsky is wise to criticize both parties and he understands the public's anger regarding the Wall Street bailout.  And he even takes a shot at Henry Paulson.  It's hard not to like the guy.  Go read the profile at Bloomberg.


Bloomberg Link  >>


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Reader Comments (13)

COVER-UP: New York Fed Officials Pressured the SEC to Grant 'National Security' Status To Hide AIG's $62 Billion Gift To Banks

Apr 29, 2010 at 12:57 PM | Registered CommenterDailyBail
A 25 Billion Dollar Secret: The NY Fed, Goldman & The AIG Cover-Up



How The NY Fed, Under Stephen Friedman & Tim Geithner Pressured AIG Officials To Withhold Details Of Payments To Goldman Sachs, Other Counterparties

Apr 29, 2010 at 12:57 PM | Registered CommenterDailyBail
AIG Probe May Lead to Criminal Coverup Charges, Barofsky Says



SIGTARP Barofsky Promises Handcuffs (Dylan Ratigan with Barofsky)

Apr 29, 2010 at 12:59 PM | Registered CommenterDailyBail
BREAKING: French Were Willing to Negotiate AIG Discounts, Barofsky Says



SIGTARP Barofsky's Latest Bailout Assessment (VIDEO)

Apr 29, 2010 at 1:00 PM | Registered CommenterDailyBail
Apr 29, 2010 at 1:00 PM | Registered CommenterDailyBail

Bloomberg Scoop Has Implications for Geithner, Ex-Goldman Chair
Apr 29, 2010 at 1:05 PM | Registered CommenterDailyBail
Nice write-up and analysis.
Apr 29, 2010 at 1:23 PM | Unregistered CommenterJames H
thx...barofsky has it out for geithner i think...on a personal level...you can tell he doesn't like him...all types of power struggles between sigtarp and treasury over jurisdiction...i think he wants to charge him but his case is weak since timmy can claim he wasn't aware, etc...
Apr 29, 2010 at 2:00 PM | Registered CommenterDailyBail
Please let it be Timmy.
Please let it be Timmy.
Please let it be Timmy.
Please let it be Timmy.
Please let it be Timmy.
Please let it be Timmy.
Apr 29, 2010 at 6:46 PM | Unregistered CommenterZarathustra
Please let it be Timmy and Friedman.
Apr 29, 2010 at 11:05 PM | Registered CommenterDailyBail
DB...What is true, what is false? Where do you stand? What is so wrong with this clip. Don't worry, it's short and interesting.

May 1, 2010 at 3:04 PM | Unregistered CommenterZarathustra
it's a decent clip...obama continuing bush's path...
May 2, 2010 at 11:06 AM | Registered CommenterDailyBail

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