The more the Republicans push for some kind of October Surprise on the Benghazi attacks, the more mortified we should all be about the politics of grave dancing. More information is coming out on the damage to US intelligence in Benghazi and the Middle East by Issa’s public hearings. Issa’s document dump has exposed safe houses and Libyans working for the US. He’s actually exposed US intelligence assets and put their lives in danger. This is yet another –ala Cheney–of the ways Republicans will actually kill US interests and people in an effort to put their political power and aims above everything else.
“The American people deserve nothing less than a full explanation from this administration about these events, including why the repeated warnings about a worsening security situation appear to have been ignored by this administration. Americans also deserve a complete explanation about your administration’s decision to accelerate a normalized presence in Libya at what now appears to be at the cost of endangering American lives,” Issa and Rep. Jason Chaffetz (R-UT) wrote today in a letter to President Barack Obama.
But Issa didn’t bother to redact the names of Libyan civilians and local leaders mentioned in the cables, and just as with the WikiLeaks dump of State Department cables last year, the administration says that Issa has done damage to U.S. efforts to work with those Libyans and exposed them to physical danger from the very groups that had an interest in attacking the U.S. consulate.
“Much like WikiLeaks, when you dump a bunch of documents into the ether, there are a lot of unintended consequences,” an administration official told The Cable Friday afternoon. “This does damage to the individuals because they are named, danger to security cooperation because these are militias and groups that we work with and that is now well known, and danger to the investigation, because these people could help us down the road.”
One of the cables released by Issa names a woman human rights activist who was leading a campaign against violence and was detained in Benghazi. She expressed fear for her safety to U.S. officials and criticized the Libyan government.
“This woman is trying to raise an anti-violence campaign on her own and came to the United States for help. She isn’t publicly associated with the U.S. in any other way but she’s now named in this cable. It’s a danger to her life,” the administration official said.
Another cable names a Benghazi port manager who is working with the United States on an infrastructure project.
“When you’re in a situation where Ansar al-Sharia is a risk to Americans, an individual like this guy, who is an innocent civilian who’s trying to reopen the port and is doing so in conjunction with Americans, could be at risk now because he’s publicly affiliated with America,” the official said, referring to the group thought to have led the Benghazi attack.
Emptywheel lays it out even more clearly: ‘Darrell Issa Exposes the CIA as a Foreign Policy Debate Stunt”. Here’s a sample. (H/T to RalphB).
Darrell Issa just released a bunch of documents so as to seed the Sunday shows in time for Monday’s foreign policy debate. [Update: See Josh Rogin’s reported description of some of the sensitivities Issa exposed.]
Here’s a running explication of what he released, all in the name of “national security.”
PDF 1: In December, Jeffrey Feltman asked Patrick Kennedy to approve “a combined footprint of 35 U.S. government personnel in Benghazi.” That would include 10 people identified as State: 8 State Department and USAID, and 2 temporary duty personnel.
Which leaves 25 people unaccounted for.
As it happens, the Libyans say there were 29 people they hadn’t expected when they came to evacuate the Americans. They complained afterwards that the Americans hadn’t told them about all the spooks they’d have onsite.
Well, now, Issa just confirmed they were not State or even USAID personnel. He has confirmed the Libyans’ claims–that they were spooks.
And then there’s this:
Because of budget considerations and the reduced footprint, Diplomatic Security’s current presence consists of two Special Agents…
As far back as December 2011, budget considerations were driving the small security footprint in Benghazi.
The budget considerations put into place by the GOP cuts to State’s budget.
The Romney campaign may have misfired with its suggestion that statements by President Obama and U.N. Ambassador Susan Rice about the Benghazi attack last month weren’t supported by intelligence, according to documents provided by a senior U.S. intelligence official.
“Talking points” prepared by the CIA on Sept. 15, the same day that Rice taped three television appearances, support her description of the Sept. 11 attack on the U.S. Consulate as a reaction to Arab anger about an anti-Muslim video prepared in the United States. According to the CIA account, “The currently available information suggests that the demonstrations in Benghazi were spontaneously inspired by the protests at the U.S. Embassy in Cairo and evolved into a direct assault against the U.S. Consulate and subsequently its annex. There are indications that extremists participated in the violent demonstrations.”
The CIA document went on: “This assessment may change as additional information is collected and analyzed and as currently available information continues to be evaluated.” This may sound like self-protective boilerplate, but it reflects the analysts’ genuine problem interpreting fragments of intercepted conversation, video surveillance and source reports.
The senior intelligence official said the analysts’ judgment was based in part on monitoring of some of the Benghazi attackers, which showed they had been watching the Cairo protests live on television and talking about them before they assaulted the consulate.
“We believe the timing of the attack was influenced by events in Cairo,” the senior official said, reaffirming the Cairo-Benghazi link. He said that judgment is repeated in a new report prepared this week for the House intelligence committee.
The latest information is that there is now no evidence of an Al Qaeda role in the attack on the Benghazi consulate. This is also something falsely bandied around by Republicans like Sununu who insists the Libyan attack showed the President is lying about the strength of Al-Qaeda in the region. Another shameless attempt to portray on foreign policy in the area as misguided and most likely another attempt to justify more military intervention and the Romney platform of $2 trillion increases in military spending. It should also be emphasized that the attack did not occur on the US embassy in Libya because there’s also been this Republican inference that embassy security was weak and so allowed the attack. Consulates are not embassies.
The assault on the U.S. diplomatic mission in Benghazi last month appears to have been an opportunistic attack rather than a long-planned operation, and intelligence agencies have found no evidence that it was ordered by Al Qaeda, according to U.S. officials and witnesses interviewed in Libya.
The circumstances of the Sept. 11 attack have become a matter of heated political debate, with President Obama and Republican nominee Mitt Romney clashing in their debate Tuesday about when Obama termed the assault an act of terrorism. But the emerging picture painted by intelligence officials and witnesses differs from the assertions of both sides.
Republicans have zeroed in on possible Al Qaeda ties to the Sept. 11 attack that killed Ambassador J. Christopher Stevens and three other Americans, and have criticized the Obama administration for not saying early on that it was an act of terrorism. But after five weeks of investigation, U.S. intelligence agencies say they have found no evidence of Al Qaeda participation.
The attack was “carried out following a minimum amount of planning,” said a U.S. intelligence official, who, like others, spoke on condition of anonymity to discuss a matter still under investigation. “The attackers exhibited a high degree of disorganization. Some joined the attack in progress, some did not have weapons and others just seemed interested in looting.”
A second U.S. official added, “There isn’t any intelligence that the attackers pre-planned their assault days or weeks in advance.” Most of the evidence so far suggests that “the attackers launched their assault opportunistically after they learned about the violence at the U.S. Embassy in Cairo” earlier that day, the official said.
The lack of a firm Al Qaeda link could constrain U.S. military options. The administration believes it has the right under international law to use lethal force against Al Qaeda operatives who kill Americans, but that case would be harder to make against members of a Libyan militia.
You may recall the Sununu meltdown on Soledad O’Brien’s CNN interview the other day. He should really look stupid and hyperpolitical now.
Republicans are continuing the Cheney-Bush policy of misleading people to further their own political and NeoCon agendas. It is more important than ever that the press continue to ignore their grave dancing and follow the actual process of getting to the facts. We’re basically seeing the same sort of crap that lead us into Iraq repeating. It’s nothing but basic Republican propaganda in support of NeoCon Lies. Let’s hope that more of this comes to the surface during the Monday night presidential debates on foreign policy. We don’t need any more unnecessary wars.
I tucked the link to this incredible Fortune article down thread on the Morning Reads. However, I think it’s worth front paging it and emphatically suggesting you read it. Its the result of a six month journalistic investigation that’s definitely Pulitzer-worthy. Plus, it’s Fortune. Republicans cannot call this a magazine with a liberal bias without sounding batty. The article is full of analytical gems like this one.
“Republican senators are whipping up the country into a psychotic frenzy with reports that are patently false.”
Not that we didn’t suspect that already with BostonBoomer’s previous foray into to the topic. My only hope is that some of this information will stop the witch hunt against Eric Holder and get down to the actual problem. Here’s a bit from MoJo to motivate you to read it.
But Fortune’s Katherine Eban has a long piece about F&F in this week’s issue, and if she’s even close to right, then everything I thought I knew was wrong. F&F wasn’t a gun walking operation. Nobody deliberately allowed guns to be shipped to Mexican drug lords. Nobody stupidly lost track of the guns. It just didn’t happen.
Eban’s story is too long and detailed to be excerpted, but when I started reading I couldn’t stop. My mouth was hanging open the whole time. The real story, according to Eban, is about weak laws, incompetent prosecutors, juvenile bickering within the ATF’s Phoenix division, a CBS reporter who basically got played, and a craven bunch of managers and politicians who decided to throw the operation under the bus because it was too politically risky to just tell the truth. If you have even the slightest interest in this case — I’m talking to you, Jon Stewart — you need to read Eban’s story. Now.
I actually sent the article off to my Dad in Seattle because he’s been spewing Fox News propaganda on this at me and I was getting really sick of it. There’s even a book the right wing is pushing along with its meme that it’s all a conspiracy to take their guns away from them. This bit of investigative journalism actually avoids the Washington set and goes straight to people involved. Again, it’s real journalism for a change.
Quite simply, there’s a fundamental misconception at the heart of the Fast and Furious scandal. Nobody disputes that suspected straw purchasers under surveillance by the ATF repeatedly bought guns that eventually fell into criminal hands. Issa and others charge that the ATF intentionally allowed guns to walk as an operational tactic. But five law-enforcement agents directly involved in Fast and Furious tell Fortune that the ATF had no such tactic. They insist they never purposefully allowed guns to be illegally trafficked. Just the opposite: They say they seized weapons whenever they could but were hamstrung by prosecutors and weak laws, which stymied them at every turn.
Indeed, a six-month Fortune investigation reveals that the public case alleging that Voth and his colleagues walked guns is replete with distortions, errors, partial truths, and even some outright lies. Fortune reviewed more than 2,000 pages of confidential ATF documents and interviewed 39 people, including seven law-enforcement agents with direct knowledge of the case. Several, including Voth, are speaking out for the first time.
How Fast and Furious reached the headlines is a strange and unsettling saga, one that reveals a lot about politics and media today. It’s a story that starts with a grudge, specifically Dodson’s anger at Voth. After the terrible murder of agent Terry, Dodson made complaints that were then amplified, first by right-wing bloggers, then by CBS. Rep. Issa and other politicians then seized those elements to score points against the Obama administration, which, for its part, has capitulated in an apparent effort to avoid a rhetorical battle over gun control in the run-up to the presidential election. (A Justice Department spokesperson denies this and asserts that the department is not drawing conclusions until the inspector general’s report is submitted.)
This should clear up a lot of confusion over the situation and hopefully stop the political bunraku orchestrated by well-documented Thug Issa which is now being enabled by at least 4 DINO representatives.
The Justice Department also offered to conduct a briefing, give Congress documents related to whistle-blowers in the case, and work with the committee to respond to any questions it had after reviewing the materials.
In the summary, the Justice Department maintained the offer would give Congress “unprecedented access to deliberative documents.” The administration official said the documents would “dispel any notion of an intent to mislead Congress.”
“This was a good-faith effort to try to reach an accommodation while still protecting the institutional prerogatives of the executive branch, often championed by these same Republicans criticizing us right now,” White House spokesman Eric Schultz told CNN. “Unfortunately, Republicans have opted for political theater rather than conduct legitimate congressional oversight.”
Boehner, however, said a failure to cooperate by the Obama administration forced House Republicans to take up the contempt measure.
1. Issa Has No Case: Issa’s uncovered no evidence showing Holder bears any blame for the botched operations begun under George W. Bush, even though the Justice Department turned over thousands of pages of documents concerning the operations. Instead of accepting this fact, Issa has requested many more documents containing confidential information regarding ongoing law enforcement investigations, and is now threatening to hold Holder in contempt if these documents are not turned over. Holder is entirely correct to withhold these documents, however, because Justice Department documents are not subject to congressional subpoena if they would reveal “strategies and procedures that could be used by individuals seeking to evade [DOJ’s] law enforcement efforts.”
2. Reagan’s Justice Department Agreed With Holder: President Reagan’s Justice Department warned in the 1980s that the Constitution’s separation of powers prevents the kind of documents Issa is seeking from being revealed to Congress because of the risk that the legislature could “exert pressure or attempt to influence the prosecution of criminal cases.”
3. Law Enforcement Rejects Issa’s Witchhunt: Issa’s efforts to embarrass Holder are an unnecessary distraction that hinders the Department of Justice’s ability to do its real job. As an organization representing numerous senior law enforcement officials warned Issa, his efforts are “an impediment to the vigorous enforcement of violence and crime.”
4. Even Top Republicans Think Issa Goes Too Far: After Issa leaked his plans to pursue contempt charges to the media, the House Republican leadership pressured him to back off. Indeed, even House Majority Leader Eric Cantor (R-VA) has indicated that Issa is overreaching.
5. Issa Is Fixated On A Conspiracy Theory: Perhaps the most bizarre aspect of this affair is what Issa once suggested his investigation will uncover. In an interview with Sean Hannity, Issa claimed that the Obama administration “made a crisis” when they continued the Bush-era gunrunning operations because they wanted to “us[e] this crisis to somehow take away or limit people’s Second Amendment rights.” This accusation originates from a former militiaman who supports violent resistance to imagined government attempts to seize his guns. And it amounts to an accusation that a series of botched gun stings that begun during the Bush Administration were actually part of a secret Obama plot to release guns to Mexican drug lords, so that those guns could then be used to kill federal agents, which would then cause a national uprising in support of gun control.
We need to replace the right wing propaganda with facts.
Incoming Speaker Nancy Pelosi took impeachment off the table. That was our first sign that a Democratic Congress was coming in on midterm election wins, but as geldings and steers.
Not so with incoming Republicans. Get ready for congressional hearings worthy of coverage by Jesse Ventura and Conspiracy Theory. The Republican Party has clearly continued its path down into the Valley of B&gF$ck crazy.
You unlock this door with the key of imagination. Beyond it is another dimension – a dimension of sound, a dimension of sight, a dimension of mind. You’re moving into a land of both shadow and substance, of things and ideas. You’ve just crossed over into the Twilight Zone.
Well, make that the Issa Zone where every whack-a-do conspiracy theory from the right will get a subpoena and an airing on C-SPAN. All on your dime. Here’s a choice few nutty items as reported by Politico today.
According to an outline of the committee’s hearing topics obtained by POLITICO, the House Oversight and Government Reform is also planning to investigate how regulation impacts job creation, the role of Fannie Mae and Freddie Mac in the foreclosure crisis; recalls at the Food and Drug Administration and the failure of the Financial Crisis Inquiry Commission to agree on the causes of the market meltdown.
Issa’s even went as far as calling the Obama administration the most corrupt in history. He’s walked that one back already. You know, I’m not fond of the current POTUS but any one remember Nixon and the Watergate break-in? Reagan/Bush and Iran-Contra? How about the Tea Pot Dome scandal? I’m not seeing corruption right now in the White House; just incompetence and cave-ins.
Asked on “Fox News Sunday” about reports that the White House is staffing up on lawyers to prepare for his oversight hearings, Issa said: “They’re going to need more accountants.
“It’s more of an accounting function than legal function,” Issa said. “It’s more about the inspector generals than it is about lawyers in the White House. And the sooner the administration figures out that the enemy is the bureaucracy and the wasteful spending, not the other party, the better off we’ll be.”
We have exactly two days before the patients are in charge of the asylum. Mike Allen of Politico has Issa’s little list. It seems like we’re about reading to return to the McCarthy era.
Issa’s list: “1. Impact of regulation on job creation … 2. Fannie/Freddie & the Foreclosure Crisis … 3. Financial Crisis Inquiry Commission and the failure to identify origins of the financial crisis … 4. Combating corruption in Afghanistan … 5. WikiLeaks … 6. FDA/Food & Drug Safety.”
Regulation’s impact on job creation? Why the Financial Crisis Committee can’t agree? Why doesn’t he just create a panel called ‘Bircher Memes We love and Wish to cram down the public’s throat on their dime’ ?
If you want my conspiracy theory it’s that the Republicans are trying to create an atmosphere by which we do take a hit on the National Credit Score. That’s going to lead to a call to wreck Social Security, Medicare and Medicaid. They’re manufacturing a crisis and we have a cave-in leader. The bond market problems won’t be a result of problems because we don’t have the ability to honor our debt or print more money. It will be because the rest of the world is going to start thinking that we’re going to default because of ideologues intent on crashing the economy and defaulting. Plus, they have enough evidence-to-date that our economics-ignorant President will most likely go along with it. Even Lindsay Graham joined the lalala-fingers-in-ears Republicans who wish to shut down all rational debate. If this is any indication of what will go on in two years, then Obama should be re-elected easily. What rational American would vote for a group of people intent on ruining the country?
Sometime in the next few months, the U.S. will reach its debt limit and Congress will, once again, have a choice: Raise the limit or let the U.S. default on its obligations. For a while now, Tea Party Republicans like Senator Mike Lee, who unseated the insufficiently conservative Robert Bennett in Utah, have been threatening to vote against the debt ceiling increase unless they win substantial reductions in government spending. Idle threats about refusing to raise the debt ceiling are nothing new, but the Tea Party crowd seems quite serious about it–in part because they’ve promised their base they’re going to do it.
This kind of thing–willfully refusing to pay our bills–is what throws individuals in jail. It’s called FRAUD. These guys empowered Bush and his war spending spree as well as providing irrational tax cuts for the entire decade. Now they want to play a dine and dash on the bill?
As many others have noted, the demand of going back to 2008 spending levels is radical and, not coincidentally, highly unrealistic: According to the Center on Budget and Policy Priorities, it’d amount to a one-fifth cut in discretionary spending–forcing cuts that could damage the fragile recovery and starve programs like Pell Grants that most Americans value.
And the alternative—failing to increase the debt ceiling? What precise effects would that have? This isn’t my area of expertise, but my colleague Alex Hart knows a thing or two about it. Here’s what he wrote last week:
Recent history provides a sense of just how scary this would be. “The reason the markets calmed down [during the financial crisis] is that we took [the banks’] toxic assets and handed the financial institutions Treasurys,” says Kevin Hassett, a scholar at the American Enterprise Institute. “If we’re in a default situation, the Treasurys themselves are the toxic assets, and it’s not clear what we can hand anybody to calm them down.”The sad thing is, Graham seems to grasp this: In the same interview, he notes that default could be catastrophic. But that’s not stopping him from making his demands. And that’s particularly disheartening, since he is supposed to be one of the more reasonable members of the Republican Senate caucus.
I can’t imagine this is what most people in the country voted for during the midterm elections. If so, we’re in a lot bigger trouble than even I imagined and it’s time to stock up on bullets and barrels of food. What’s worse, is we have an entire group of really insane media cheerleaders that will be egging on the revolution. It’s just a damned shame.
I should’ve stuck to my research agenda, but no, I just had to go look at business headlines. There’s a debate on at The Economist over “Who benefits from financial innovation?” Nobel Prize winning Economist Joseph Stiglitz is arguing that financial innovation hasn’t been boosting economic growth but his position (which is mine) is currently in the minority.
The right kind of innovation obviously would help the financial sector fulfil its core functions; and if the financial sector fulfilled those functions better, and at lower cost, almost surely it would contribute to growth and societal well-being. But, for the most part, that is not the kind of innovation we have had.
In terms of that big question up there, the answer is found today on Bloomberg.com. If you answered “what is the vampire squid”,you’re absolutely right. The more relevant question appears to be what did that cost us? For that, I can only answer a lot and there’s more to come. Here’s the headline: Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs.
Well, there’s your financial innovation for you.
So, the fun thing about the story is that the unlikely hero is Darrold Issa (Republican) member of the House Committee on Oversight and Government Reform who “placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.” Oddly enough,it appears that Issa may have not really known exactly what he had just disclosed. It didn’t really attract any attention at the time. Luckily, some one who knew something eventually looked at it. This was essentially a list of the deals that made AIG insolvent. These were also the deals that the government basically bought when it rescued AIG.
The document Issa made public cuts to the heart of the controversy over the September 2008 AIG rescue by identifying specific securities, known as collateralized-debt obligations, that had been insured with the company. The banks holding the credit-default swaps, a type of derivative, collected collateral as the insurer was downgraded and the CDOs tumbled in value.
The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place.
Here’s an even more interesting analysis from a legal standpoint. I know the deal was shady, I just have never known exactly if shady=unethical=illegal. The devil is truly in the details placed into public record by Issa.
The identification of securities in the document, known as Schedule A, and data compiled by Bloomberg show that Goldman Sachs underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured — more than any other investment bank. Merrill Lynch & Co., now part of Bank of America Corp., created $13.2 billion of the CDOs, and Deutsche Bank AG underwrote $9.5 billion.
These tallies suggest a possible reason why the New York Fed kept so much under wraps, Professor James Cox of Duke University School of Law says: “They may have been trying to shield Goldman — for Goldman’s sake or out of macro concerns that another investment bank would be at risk.”
Okay, so we know who we’re speaking of when Cox says the New York Fed, right? That would be Treasury Secretary Timmy-really-in-the-well-this-time Geithner. Bloomberg is going as far as to label his actions a cover-up. I frankly think that looks like a mild charge. Interestingly enough, an earlier version of the information was released by AIG but the counterparty names were redacted at the time. Chris Dodd’s committee had requested the information. Without the names–or more truthfully the frequency of ONE name in particular–you can’t really see much of a conspiracy.
What this detailed list shows–because the names are now out there along with the deals–is that the very same folks that underwrote the original toxic securities were the same folks that went to AIG to bet against them. It doesn’t look like they were hedging or placing insurance on their risk which would be natural and understandable transactions. It appears they fully knew the securities were bad and were preparing to make money by placing offsetting bets. This activity could only be determined if you saw the names of the counterparties next to the deals themselves. So, the appropriate document to list the information on would be a Schedule A. AIG released a schedule A for several years during the crisis, but without some of the most relevant details. We know now that this was at the request of the NY Fed (aka Tim–I’ve got GS on speed dial–Geithner).
In late November 2008, the insurer was planning to include Schedule A in a regulatory filing — until a lawyer for the Fed said it wasn’t necessary, according to the e-mails. The document was an attachment to the agreement between AIG and Maiden Lane III, the fund that the Fed established in November 2008 to hold the CDOs after the swap contracts were settled.
AIG paid its counterparties — the banks — the full value of the contracts, after accounting for any collateral that had been posted, and took the devalued CDOs in exchange. As requested by the New York Fed, AIG kept the bank names out of the Dec. 24 filing and edited out a sentence that said they got full payment.
The New York Fed’s January 2010 statement said the sentence was deleted because AIG technically paid slightly less than 100 cents on the dollar.
Before the New York Fed ordered AIG to pay the banks in full, the company was trying to negotiate to pay off the credit- default swaps at a discount or “haircut.”
Read that date. We’re talking November 2008. If you read further into the Bloomberg article you’ll see that the names were withheld also during 2009. Issa put the names out because he wanted to show U.S. taxpayers where their money went. It’s unclear to me if he understood then or maybe even now that by putting out the details of the deals, he’s basically provided information that let’s us know how deeply Goldman Sachs was in on the financial innovations that blew up the economy. Not only that, it appears they knowingly may have been loading some of those innovations with assets they knew would explode and that they were actively placing bets on that outcome at AIG. As of the end of January, 2010 meeting, Geithner and the NY Fed still didn’t want the details released. No fucking wonder!
Janet Tavakoli, founder of Tavakoli Structured Finance Inc., a Chicago-based consulting firm, says the New York Fed’s secrecy has helped hide who’s responsible for the worst of the disaster. “The suppression of the details in the list of counterparties was part of the coverup,” she says.
E-mails between Fed and AIG officials that Issa released in January show that the efforts to keep Schedule A under wraps came from the New York Fed. Revelation of the messages contributed to the heated atmosphere at the House hearing.
Tavakoli also says that the poor performance of the underlying securities (which are actually specific slices or tranches of CDOs) shows they were toxic in the first place and were probably replenished with bundles of mortgages that were particularly troubled. Managers who oversee CDOs after they are created have discretion in choosing the mortgage bonds used to replenish them.
“The original CDO deals were bad enough,” Tavakoli says. “For some that allow reinvesting or substitution, any reasonable professional would ask why these assets were being traded into the portfolio. The Schedule A shows that we should be investigating these deals.”
So, check this out.
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, who delivered a report on the AIG bailout in November, says he’s not finished. He has begun a probe of why his office wasn’t provided all of the 250,000 pages of documents, including e-mails and phone logs, that Issa’s committee received from the New York Fed.
Okay, now, follow closely as I connect the dots to this one: U.S. Treasury loan plan may exclude TARP watchdog.
If you were Timothy Geithner, would you want Neil Barofsky poking around any more programs? Wouldn’t you be highly interested in controlling TARP oversight? No wonder Treasury officials and others have been after Barofsky for some time. (Here’s an outline of their actions and attempts to remove independency by Glenn Greenwald at Salon from last summer. )
Geithner basically knew the vampire squid was a huge contributor to the fall of AIG. It looks like he may have actively encouraged covering-up that information. It also looks like GS actively securitized mortgages it knew would fail eventually and made huge counterbets based on that information using AIG as its personal bookie. Then, when AIG couldn’t cover the bets, GS refused to negotiate any deals (they must’ve known something like a bail out was forthcoming). Then knew exactly what was in those securities so they knew their real value. Geithner made AIG pay GS 100% of the value when it appears they were worth around 35%. When AIG tried to report the counterparties, the NY FED told them to withhold the information. (Yet, post Timmy, the NY FED appears to have released everything to Issa’s committee. During Timmy’s time, remember, everything was heavily edited and Barofsky appears not to have gotten the same information.) They also were told not to provide details on the mark downs. Timmy must’ve known that Goldman was betting against the toxic assets they had created. Not only that, it looks like Goldman was actually shorting themselves! AND these guys were Obama’s major contributors. Giethner must’ve been part of the packaged deal.
I got one thing to say now. A lot of folks should be doing a perp walk on this one. This looks like fraud. If this is the kind’ve financial innovation these folks voting on The Economist poll want, then they should just as well turn their life savings over to Bernie Madoff right now. I just wish they’d stop giving the likes of him mine too.
(I hope I’ve explained this adequately, cause this sure is one fucking twisted tale.)