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Bailout AIG Breaking News: Tim Geithner Might Not Survive The Weekend. Of Bonuses, Lies And Videotape

"Of Bonuses, Lies and Videotape"

The AIG bonus outrage is quickly becoming a nightmare for the Obama administration as several new reports now call into question the truthfulness of statements made by administration officials earlier this week.  The issue has now advanced to the who-knew-what-and-when stage, which is generally a prelude to a forced resignation.  The obfuscation and dissembling from members of the Obama administration support the notion of a cover-up.  We reveal the details below.

TIME is reporting that Treasury officials knew of bonus retention payments to be made to AIG much earlier than previously claimed.  The implication is that Treasury Secretary Tim Geithner perjured himself this week when he testified under oath to Congress that he first learned of AIG bonus payments on March 10th.  Details from Time:

Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG's impending $160 million bonus payments to members of its troubled financial products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28.  That is 10 days before Treasury staffers say they first learned "full details" of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.

"Treasury staff was informed about the new bonuses in a Feb. 28 memo that the March 15 [bonus-payment] date was upcoming," a Federal Reserve source tells TIME.  A Treasury Department source, speaking on background, confirmed the e-mail memo and its contents, saying, "Everybody knew that [AIG] had a retention issue."

The New York Fed even went so far as to warn Treasury staffers that the bonuses were a hot-button issue.  In the past, the memo says, the "retention," or bonus, issue has drawn the attention of both Capitol Hill staffers and the media.  The New York Federal Reserve forwarded further details of the plan to Treasury on March 5 and even more specifics in a March 9 memo, which Treasury officials had previously said was their first detailed warning of the bonus trouble.

Not susrprisingly, the anonymous Treasury source attempts to protect Secretary Geithner by blaming career Treasury staffers for not informing the Secretary promptly.  This argument is completely and demonstrably false.  Has the Obama administration forgotten about about news archives.

Several capable journalists, thankfully, have not. Jane Hamsher in an article on firedoglake, has documented the media coverage from 6 weeks ago that shows unequivocally that President Obama along with Lawrence Summers and Secretary Geithner pressured Senator Chris Dodd to alter his ammendment to the stimulus bill that would have made all future bonus payments made to executives at bailed-out companies subject to strict limits. 

Obama, Geithner and Summers were concerned about the effect Dodd's ammendment would have upon previously negotiated bonus contracts at AIG.  As Reuters reports tonight, it was only after repeated demands from the White House, that Sen. Dodd agreed to alter the language of his rider so that it would exclusively apply to compensation agreements made after Feb. 11th.

The facts as presented by TIME and Reuters, and confirmed by news archives from mid-February, shine an uncomfortable light on a new administration still struggling to find its groove.  And they reveal a tendency that will serve none of us well.  Sadly, that President Obama is willing to lie to the American people, and that his economic minions, Geithner and Summers and Robert Gibbs are also prevaricators of the highest order.

Glenn Greenwald writes in The Dishonest 'Blame Dodd' Scheme:

There is a major push underway -- engineered by Obama's Treasury officials, enabled by a mindless media, and amplified by the right-wing press -- to blame Chris Dodd for the AIG bonus payments.  That would be perfectly fine if it were true.  But it's completely false, and the scheme to heap the blame on him for the AIG bonus payments is based on demonstrable falsehoods.

There is outstanding detail in Greenwald's and Hamsher's accounts that readers need to see, but for our purposes, two salient facts emerge.  First, that in painful Slick Willy style, the Obama White House is willing to sacrifice the truth and destroy a fellow Democrat (Dodd) in order to preserve it's populist image.  And more importantly that Obama, Geithner and Summers all knew about the AIG retention bonuses long before February 28th as postulated by TIME above, and certainly before March 10th, as Geithner testified to Congress under oath earlier this week.  The news archives quoted by both authors demonstrate conclusively that President Obama, Geithner and Summers were aware in mid-Februrary of the upcoming AIG bonuses, and that they wanted to make sure those payouts were not threatened by Dodd's ammendment.

This is not surprising, as Geithner was the architect, along with Paulson, Bernanke and possibly Lloyd Blankfein, of the original AIG bailout, and so the claim that Geithner was unaware of the pending bonus payments would seem disingenuous on it's face. When the evidence from the February archives is added, disingenuous quickly morphs into lies.

Further adding to Obama's difficulties, this afternoon Senator Dodd himself confirmed to Wolf Blitzer of CNN that he modified his ammendment to the stimulus bill in order to protect previously agreed upon compensation contracts (read AIG bonus payments) only after repeated requests of un-named Treasury officials.  

After consideration of the work of Greenwald, Hamsher, TIME, Reuters and the statement from Senator Dodd, there is no longer a question that, among others, these un-named officials included Geithner, Summers and President Obama.

I expect these revelations will gain traction quickly within the halls of Congress where members, desperate to appear appropriately outraged, will seize upon the reports and demand the sacrifice of a high-level administration official.  With his bank bailout mis-steps and his willful tax cheating still fresh in Congressional memory, the obvious candidate for expulsion is TG.

I have seen this movie several times before and it generally ends the same (exception Rumsfield). So I am confident in saying tonight, goodbye and good riddance to Treasury Secretary Tim Geithner.

It has been nice knowing you and please allow the door to smack you in the ass on your way out.


Geithner Knew Everything    Jane Hamsher

Treasury Attempts To Blame Dodd For AIG Bonuses   Jane Hamsher

Who Asked Dodd to Defang Anti-Bonus Provision?

The Dishonest Blame Dodd Scheme from The White House     Glenn Greenwald

Obama officials sought to keep AIG Bonuses    Reuters

Time Magazine on Geithner


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Reader Comments (24)

This Presidency is a cluster fu-k. Hire the man to bring change and all he has come up with was the same clowns that got us here in the first place. Not only that but he picked the worst liars and tax cheats that were available. You want change.....wait till Joe 6 Pack wakes his sorry butt up and starts throwing the Budweiser cans at the TV instead of the wife. Most don't even realize that a Belgium Company bought the American legend of brewing. Wait for when this sorry schmuck "Turbo Tax Timmmaaayyyy" gets outed by the other crooks on Capitol Hill that want to get re-elected. This is gonna be better TV than American Idol or Nascar!
Mar 19, 2009 at 12:10 AM | Unregistered CommenterAin't Bullshittin'
@ AB

Very well stated as usual. You have a way with language.

Obama's AIG Outrage: All Talk, No Action

Mar 19, 2009 at 5:23 AM | Registered CommenterDailyBail
The AIG Bonuses: Getting Mad and Getting Even

Mar 19, 2009 at 5:25 AM | Registered CommenterDailyBail
Mexico Retaliates To Our Protectionism With Protectionism of Their Own

Interesting stuff.

Mar 19, 2009 at 5:27 AM | Registered CommenterDailyBail
Politicians in Washington have been denouncing American International Group, the insurance company that has received some $170 billion in federal bailout funds, for paying retention bonuses amounting to just under 1/1,000th of this sum to executives in its financial products division. AIG says it is contractually obligated to pay out the bonuses, but maybe a more effective argument would be: Hey, forget it! This is last year's business!

Don't laugh. That's the argument the Obama administration used, as the Washington Post noted in an editorial earlier this month:

Mar 19, 2009 at 5:27 AM | Registered CommenterDailyBail
Mar 19, 2009 at 5:28 AM | Registered CommenterDailyBail
March 17 (Bloomberg) -- The U.S. risks sending the world into a depression as its bailouts of failed companies rob healthy businesses of capital, investor Jim Rogers said.

“The U.S. is taking assets from competent people and giving them to incompetent people,” said Rogers, chairman of Singapore-based Rogers Holdings and the author of books including “Investment Biker” and “Adventure Capitalist.” “That’s bad economics.”

The U.S. government should let American International Group Inc., whose fourth-quarter loss was the worst in corporate history, go bankrupt, Rogers added in a Bloomberg Television interview today. Congress approved a $700 billion bank bailout package in October, and President Barack Obama’s administration has suggested it may need an additional $750 billion.

Mar 19, 2009 at 5:29 AM | Registered CommenterDailyBail
WASHINGTON - The head of battered insurance giant AIG told Congress on Wednesday that “we’ve heard the American people loudly and clearly” in their rage over executive bonuses.

Under intense pressure from the Obama administration and Congress, the head of the bailed-out insurance giant declared that some of the firm’s executives have begun returning all or part of bonuses totaling $165 million. He said the payouts were a legal obligation of the company, although he called them “distasteful.”

Mar 19, 2009 at 5:36 AM | Registered CommenterDailyBail
Wow. Bust goes the greenback.

LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.

Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Mar 19, 2009 at 5:45 AM | Registered CommenterDailyBail
It's getting bad in Japan.

Japanese economy in worst shape since Second World War

New figures have revealed the Japanese economy shrank by 3.2pc in the last three months of 2008, leaving the world's second-largest economy in "dire" straits. Manufacturers have slashed production and jobs as demand for goods evaporates at an unprecedented rate.

Mar 19, 2009 at 5:46 AM | Registered CommenterDailyBail

I know the chances are slim, but is there anyone who works for AIG that can tell us what the hell is going on internally?

Mar 19, 2009 at 5:54 AM | Registered CommenterDailyBail
AIG Staff Get 'Death Threats' Over Bonuses

Mar 19, 2009 at 5:55 AM | Registered CommenterDailyBail
Rep. Paul Kanjorski opened today's questioning of Edward Liddy with a jaw-dropper: Kanjorski had numerous discussions with Liddy and knew about the contracts (which included the contentious bonuses) for a minimum of four to six weeks. He says he requested supporting documents, but, when AIG was not forthcoming, he evidently did not bring this to the attention of the Financial Services committee and move for a subpoena of the information, nor did he move to stop the bonuses going ahead.

Mar 19, 2009 at 6:10 AM | Registered CommenterDailyBail
If I were inclined to believe Timothy Geithner didn't know about the AIG bonuses until last Tuesday—as the administration claims—that went out the window when I went to the AIG hearing on the Hill today and listened to Paul Kanjorski declare that he had known about them at least four to six weeks ago. As he said on CNBC today:

I'm sick and tired of hearing the administration and the Secretary of the Treasury say "we just found out about it." That's not true. And if he did just find out about it on Thursday or Wednesday then he better get to his mail department and to his telephone people because we communicated with the Treasury at least six or seven times.

Liddy also said that the Fed, and specifically Ben Bernanke, knew that the bonuses were going to be paid and approved them.

My Dodd story from yesterday continued to snowball. Robert Gibbs tried to stick it to Dodd four—count 'em—four times in yesterday's presser, referring to "the Dodd provisions," the "Dodd amendment," "the Dodd legislation" and "the Dodd compensation requirements." Today, Dodd pushed back on CNN:

Mar 19, 2009 at 6:12 AM | Registered CommenterDailyBail
Check out this new site.

Mar 19, 2009 at 6:50 AM | Registered CommenterDailyBail
Now Grassley's made another eyebrow-raising comment about the insurance group, but this one might be more popular. At a press event today, told reporters that it's "irresponsible for corporations to give bonuses" when they're "sucking the tit of the taxpayer." Watch:

Mar 19, 2009 at 6:53 AM | Registered CommenterDailyBail
"disingenuous quicky" - nice freudianism, but I suspect you meant to say "quickly".
(Also, the previous use of disingenuous is mis-spellt.)

Exceedingly minor quibbles in an informative piece. Thanks
Mar 19, 2009 at 7:03 AM | Unregistered CommenterScuzzaMan

Thanks for the heads up. Fixed.
Mar 19, 2009 at 8:41 AM | Registered CommenterDailyBail
The awnser is to tax the bonuses at 90%? The bulk of the recipients live in London, as in the UK.
Mar 19, 2009 at 11:07 AM | Unregistered CommenterFrankD
Elliott Spitzer says "quickies" in NY are EXPENSIVE. Brought to you by Client #9......everyone has a number!
Mar 19, 2009 at 11:40 AM | Unregistered CommenterAin't Bullshittin'
All the bonus talks are to mask the real money being paid to the 12 goons at 100% the CDS face value.
Go ahead scream about the $200 million in bonus while, $200 billion is being piped out to wall street.

Change is comming - in quarters and pennies in your torn hat. keep hoping for that.
Mar 19, 2009 at 1:09 PM | Unregistered CommenterNV
@ NV

If you actually read my stuff, I'm not very outraged.

Perhaps you should have read my story from yesterday where I make the same point you do.

$165 million versus $165 billion.

Mar 19, 2009 at 2:28 PM | Registered CommenterDailyBail
The Triumphant Return Of Tricky Dick: Treasury Secretary Tim Geithner Is Still Lying And We Prove It (Video, Photos And Links For 3-20-09)

Mar 20, 2009 at 6:57 PM | Registered CommenterDailyBail

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