Tuesday, January 12, 2010

SEC Seals AIG Bailout Information

Last year AIG filed an exhibit with its SEC financial filings detailing information about its bailout.  In May of last year, the SEC sealed the information and will not release it to the public until November 25, 2018.  The agreement by the SEC to treat this information as confidential when public funds were used is unconscionable and an absolute breach of fiduciary duty to the American people.

Unfortunately, the pattern is consistent with other efforts of the Treasury and the Federal Reserve to deny public access to bailout information.  The Fed is asking a U.S. Appeals Court to block a ruling that would force the Fed to disclose the names of financial institutions which received loans under the unprecedented $2 trillion U. S. loan program in 2008.

On a related note, AIG found several billions of dollars in bonds in filing cabinets in a locked storage room in 2008 when they needed to come up with collateral for a New York Fed loan.  As I remember it, it was $20 billion but I cannot find the reference in my radio show notes.  I have not made mention of this in my posts, but I know I have talked about it on my radio show.  I found this amazing when I ran across it, but Yves Smith has brought it back into the light of public discussion with this very excellent post.

The time for bailout secrecy passed some time ago.  It is about time government and the Federal Reserve caught up with their public duties and legal responsibilities to the people of the United States.

As an update, the U.S. House Oversight and Government reform Committee has indicated today that they will issue a subpeona to the New York Fed, because it has refused requests for documents on the AIG bailout which the New York Fed considers "confidential".  The New York Fed also instructed Neil Barofsky, the TARP Inspector General, to not release any "confidential" documents in his hands as the result of his November audit.  The Stonewall grows higher and thicker.

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