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« Tim Geithner's Magical Mystery Tour Of TARP Propaganda Has Little Use For Truth | Main | Bill O'Reilly Doesn't Like Ron Paul's Victory In Fox Poll »
Wednesday
Oct052011

SIGTARP Report Says Geithner Is Lying To Taxpayers About AIG, 'Hiding $40 Billion In Losses'

A tax-challenged Treasury Secretary fudging the numbers.

 

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Creative accounting from Tim Geithner

By Mary Williams Walsh

NYT - Treasury Hid AIG Loss

The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.

“In our view, this is a significant failure in their transparency,” said Neil M. Barofsky, the inspector general, in an interview on Monday.

In early October, the Treasury issued a report predicting that the taxpayers would ultimately lose just $5 billion on their investment in A.I.G., a remarkable outcome, since the insurance company was extended $182 billion in taxpayer money in the early months of its rescue. The prediction of a modest loss, widely reported as A.I.G., the Federal Reserve and the Treasury rushed to complete an exit plan, contrasted with an earlier prediction by the Treasury that the taxpayers would lose $45 billion.

“The American people have a right for full and complete disclosure about their investment in A.I.G.,” Mr. Barofsky said, “and the U.S. government has an obligation, when they’re describing potential losses, to give complete information.”

An official of the Treasury disputed Mr. Barofsky’s conclusions, saying the department appropriately used different methods for different purposes. He said the smaller loss was a projection of future events, and the larger one was the result of an audit, which includes only realized gains and losses.

“If a private company filed information with the government that was just as misleading and disingenuous as what Treasury has done here, you’d better believe there would be calls for an investigation from the S.E.C. and others,” said Representative Darrell Issa, the senior Republican on the House Committee on Oversight and Government Reform. He called the Treasury’s October report on A.I.G. “blatant manipulation.”

Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, said he thought “administration officials are trying so hard to put a positive spin on program losses that they played fast and loose with the numbers.” He said it reminded him of “misleading” claims that General Motors had paid back its rescue loans with interest ahead of schedule.

Mr. Barofsky said he had written to the Treasury secretary, Timothy F. Geithner, in mid-October, after widespread reports in the news media about the possibility that the Treasury could wind down its position in A.I.G. with just a $5 billion loss. He recommended that the Treasury correct the October report, perhaps by adding a footnote saying the methodology for calculating its losses had changed.

He said the Treasury’s statements tended to contribute to a “widespread, but mistaken, belief that TARP is at or near its end.”

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3 excellent Barofsky links:

 

 

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Reader Comments (9)

RPT-U.S. Treasury too rosy on bailout cost - TARP cop

http://www.reuters.com/article/idUSN2624110020101026
Oct 27, 2010 at 3:07 AM | Registered CommenterDailyBail
Federal Auditor Says Obama's Anti-Foreclosure Effort Risks 'Generating Public Anger And Mistrust'

http://www.huffingtonpost.com/2010/10/25/false-hope-federal-audito_n_773681.html
Oct 27, 2010 at 3:13 AM | Registered CommenterDailyBail
If you think the report was audacious, wait til you read Treasury's reponse:
http://letthemfail.us/archives/6320
Oct 27, 2010 at 12:35 PM | Unregistered CommenterWil Martindale
Sorry, that would be "response":
http://letthemfail.us/archives/6320
Oct 27, 2010 at 12:36 PM | Unregistered CommenterWil Martindale
nice one wil...i enjoyed that...short and brutal...
Oct 27, 2010 at 2:54 PM | Registered CommenterDailyBail
War is being declared on the banksters

http://market-ticker.org/akcs-www?post=183445
Apr 1, 2011 at 7:47 PM | Unregistered CommenterLiberatedCitizen
nice link...thanks
Apr 1, 2011 at 9:00 PM | Registered CommenterDailyBail
Obama Did It All By Himself

http://www.counterpunch.org/2011/10/05/obama-did-it-all-by-himself/

[snip]

“Change We Can Believe In.” Those fine words fooled a lot of people in 2008. Now they stick in the craw even of Obama apologists for whom all the hopes dashed over the past three years are the fault of Tea Party-Republican obstructionists. Expect to hear a billion dollars worth of that malarkey between now and next November.

But even those who hold Obama blameless must concede that, in every way that matters, his first term has been continuous with George Bush’s second. Yes, there have been small, mainly cosmetic changes; changing circumstances made that inevitable. And there has been a change in style. Where once there stood an inarticulate Buddy Ebsen wannabe — a living reproach to Phillips Andover, Yale, and the Harvard Business School – there is now a silver-tongued orator of whom Columbia and Harvard can be proud. But as for a change of course, a change for the better – forget it! This not even Obama’s cheerleaders can deny.
Oct 5, 2011 at 6:08 PM | Unregistered Commenterjohn

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