Blog on the Run: Reloaded

Wednesday, April 28, 2010 11:13 pm

Speaking, as I was earlier, of “Oh, please, oh, please” …


… is SIGTARP — the Special Inspector General at the Treasury Department who is responsible for rooting out waste, fraud and abuse in the federal bank bailout, going to throw the book at Tim Geithner??

[Neil Barofsky] has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.

The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.

In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16.

Leading the Charge

“I’ve been in contact with the SEC,” he told the committee. “We’re going to coordinate with them, but we’re going to lead the charge. We’re going to review these transactions.”

Barofsky and Geithner’s offices have gone toe-to-toe over AIG, alleged lax oversight of TARP funds and even over the question of whom Barofsky reports to.

Barofsky, a former federal prosecutor who was once the target of a kidnapping plot by Colombian drug traffickers, says he’s also looking into possible insider trading connected to TARP.

But that’s absurd, because no American banker would be such a cad and bounder as to run out and buy stock in his own bank before word of an impending federal bailout of that bank became public, would he?

Naaah.

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