CHESSNOID

Neil Barofsky, the Special Inspector General, came out with a report stating what I have suspected all along.  These bailouts are corrupt and have fraud written all over them.  To be politically correct, one can say the government over spent or used poor judgment.  I think the reason why the heads of the US Treasury Paulson and Federal Reserve Bernanke refused to have transparency in the 700 billion dollar tax payer bailout was because of things like this would not be approved.

Isn’t it ironic that the Federal Reserve of NY at the time who mucked this up was Geithner?  He is the same financial stooge who forgot to pay his taxes and  took over for Paulson.

Yahoo AP:

The Federal Reserve Bank of New York — headed at the time by now-Treasury Secretary Timothy Geithner — paid AIG’s business partners full face value for securities so they would cancel insurance contracts AIG had written in order to ease the firm’s liquidity crunch. But at least one of those partner banks offered to canceled the contracts for less, according to a report Monday from Neil Barofsky, the Special Inspector General for the $700 billion financial bailout Congress approved last October.

That means officials may have spent billions more than necessary to cancel debt insurance contracts with banks including Goldman Sachs Group Inc. and others, the report says.

AIG, a financial services conglomerate that was the world’s largest insurer, was considered so interconnected with other companies that its failure could upend the global financial system. As it teetered last fall, officials decided to save the company with billions of taxpayer dollars and government guarantees to prevent deepening the spreading financial crisis.

After several bailouts, AIG now holds government commitments worth up to $180 billion — more than any other company. The Treasury Department owns nearly 80 percent of the company.

Critics have long argued that AIG’s trading partners should have been forced to take less than 100 percent of the value of their contracts with AIG. They note that the protection AIG offered — in the form of complex products called credit-default swaps — was unregulated and that AIG’s trading partners knew the risks and should have to assume some losses.

The end of the associated press article highlights the point again.  The Federal Reserve mucked it up completely and cost American taxpayers BILLIONS of dollars.   I think the reason why certain government officials avoid transparency is so they can also avoid accountability.  These guys should be tried as criminals for fraud or incompetency.  Considering the dollar figures involved, they make Madoff look like an amateur.

Barofsky faults the Federal Reserve for refusing at first to reveal which banks had received billions of American taxpayer dollars supposedly intended to save AIG. The Fed released the banks’ names and the amount of their payoffs only after lawmakers demanded greater transparency.

Barofsky had earlier asserted that taxpayers are unlikely to recover the money spent rescuing AIG. Officials from Treasury and the Fed say they still hope the money will be repaid.