What Secret Is Tim Geithner Hiding About The Citigroup Bailout? The U.S. Treasury Spits On Transparency And The Grave Of Mark Pittman
Apr 1, 2011 at 4:32 PM
DailyBail in Bank Bailouts, Citigroup, Tim Geithner, U.S. Treasuries, banks, citigroup, citigroup bailout, mark pittman, tim geithner, transparency

Video:  Oct. 25 - The late Bloomberg News reporter Mark Pittman asked the U.S. Treasury in January 2009 to identify $301 billion of securities owned by Citigroup Inc. that the government had agreed to guarantee.  He made the request under the Freedom of Information Act on the grounds that taxpayers ought to know how their money was being used.  More than 20 months later, after saying at least five times that a response was imminent, Treasury responded with 560 pages of printed-out e-mails, none of which Pittman requested.

Here's the short version of Geithner's secret.  The Citigroup ring fence was a $300 billion boondoggle for taxpayers that was thrown together hastily and without thought in December of 2008, when Citigroup's stock was trading at 90 cents, and rumors of nationalization (bankruptcy) were rampant.  It was a last-ditch effort to prop up the failed and insolvent lender, and to a certain degree, it worked.  Thankfully, the asset guarantee is gone and taxpayers were never forced to absorb the carcass. 

Still, Geithner's intransigent response today shows that the details are ugly and Tim doesn't want anyone to know anything about them. 

So much for candidate Obama's commitment to transparency, above all.


Watch for the Wilbur Ross comments at the bottom.

None of the documents answers Pittman’s request for “records sufficient to show the names of the relevant securities” or the dates and terms of the guarantees.

President Barack Obama vowed to usher in a new era of open government.  On Jan. 21, 2009, the day after his inauguration and a week before Pittman submitted his FOIA request, Obama directed agencies to “adopt a presumption in favor of disclosure, in order to renew their commitment to the principles embodied in FOIA.”

The saga of Pittman’s request shows that the promise of transparency has its limits when it comes to the government’s intervention in the financial industry, which at its peak reached $12.8 trillion in commitments.  From the 2008 Bear Stearns Cos. rescue to the Federal Reserve’s policy of quantitative easing in 2010, the Obama administration has delayed disclosures and defended its right to secrecy in court.

In the 560 pages of e-mails exchanged in the last two months of 2008 and January 2009, Treasury employees and their colleagues at the Federal Reserve Bank of New York discuss with attorneys the department’s $20 billion investment in New York- based Citigroup and the $301 billion in guarantees. Both followed an initial $25 billion investment in Citigroup through the Troubled Asset Relief Program in October 2008.


Wow.  Did Wilbur Ross just say that.  That's a new low for the well-known, self-dealing, private equity charlatan.

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