This is really starting to get interesting. Not one, but two formal investigations into possible New York Fed 'misconduct' were announced late Monday night by TARP Inspector General Neil Barofsky, who will testify along with Tim Geithner on Wednesday before the House Oversight committee headed by Towns and Issa.
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The government watchdog of the Troubled Asset Relief Program has opened two new investigations as a result of documents obtained as part of a House investigation into the insurance giant AIG.
Neil Barofsky, the special inspector general of TARP, will probe whether there was any misconduct relating to the disclosure - or lack thereof - of AIG fully paying out pricey insurance contracts to big banks after receiving a government bailout, according to the inspector general's prepared testimony obtained by POLITICO.
Secondly, Barofsky will investigate the "extent of the Federal Reserve's cooperation" during an internal audit of the bailout program. A subpoena by the House Oversight and Government Reform committee produced documents not obtained by the special inspector general as part of its probe.
The testimony, which will include an official announcement of this investigation, will be given by Barofsky at Wednesday's House Oversight and Government Reform committee hearing into AIG's full payment of credit default swap contracts to big banks after the government bailed the insurance giant out with more than $150 billion dollars.
- “If anyone at the Fed thought that this investigation will stop after Wednesday’s hearing, they are completely mistaken,” Issa said yesterday in a statement. “There has been a widespread effort by officials at the New York Fed to thwart transparency and we will continue to pursue this investigation for as long as it takes.”
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