Emails Don't Lie, Just Ask The Fed Officials Who Hide Them: AIG's Disclosure Surprised, Displeased NY Fed

NEW YORK (Reuters) - New York Federal Reserve officials debated in November 2008 whether the terms of the bailout of American International Group could be kept secret from the public and whether securities regulators would even permit it to do so, according to emails obtained by Reuters on Friday.

The emails, given to Capitol Hill lawmakers by the New York Fed, revealed that some officials at the New York Fed were surprised and displeased by AIG's plan to file an exhibit with the U.S. Securities and Exchange Commission that would provide specific details of the Fed-engineered rescue package.

In a November 24, 2008 email, Alex Latorre, a New York Fed assistant vice president, asked: "But can they make these docs public without our consent? Aren't we parties to this and shouldn't we have a say?"

Paul Whynott, a New York Fed vice president, responded, "I noted that making the documents public was not contemplated in our last turn."

The email exchange will provide more ammunition for critics who contend that some officials at the New York Fed sought to keep the public in the dark about terms of the AIG bailout.

The emails were included in the mountain of documents the New York Fed turned over this week to the House Committee on Oversight and Government Reform.

In response to a request for comment, New York Fed spokeswoman Deborah Kilroe pointed to a January 19 statement in which New York Fed president William Dudley said, "We are in favor of a full and objective review of our actions."

"It has become alarmingly clear that public disclosure was the last thing on the minds of the government officials charged with protecting the taxpayers' interests," said Rep. Darrell Issa, the ranking Republican member on the House Oversight Committee.

Congressman Issa, one of the harshest critics of the bailout, said the New York Fed had assumed "a command and control relationship with AIG" and that it had sought to limit AIG's disclosures about the rescue.

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