• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

The Reason Why AIG Got Away With Its ‘Backdoor Bailout’ of Other Wall Street Firms « The Washington Independent

Yesterday, it was revealed that officials at the New York Federal Reserve — then headed by now-Treasury Secretary Tim Geithner — asked AIG to keep quiet about tens of billions of dollars the insurance giant made to other Wall Street firms after AIG had received $85 billion in federal bailout money. The revelation has sparked some outrage on Capitol Hill, where some lawmakers are calling the strategy a “backdoor bailout” to the firms AIG paid, well, through the back door — many of which had already received federal bailout funds of their own.

We speculated this morning that Geithner’s close ties to Wall Street might have been behind the decision to shield those firms from the scrutiny that would have surely followed had those payments been made public. And some Republicans are already calling on Geithner to testify about the episode. But the more influential figure might have been Marshall Huebner. Who’s Marshall Huebner? Good question. He’s the high-powered Wall Street lawyer who went, literally, from representing JPMorgan Chase one minute to leading the AIG bailout the next.

Last April, American Lawyer explained the switch like this:

Of course, Huebner had JPMorgan’s blessing. Indeed, he was in the New York Federal Reserve building, representing JPMorgan Chase, when the request came. “It was pretty wild,” says Huebner. “JPMorgan released us as counsel in about one hour, [and minutes later] “I literally went upstairs with our new clients” — the Federal Reserve Bank of New York and the U.S. Department of the Treasury. The government had turned to Huebner to lead the $152.5 billion rescue of insurance giant American International Group, Inc.

Before morphing into a G-lawyer, Huebner had represented JPMorgan Chase in its attempt to complete a private rescue of AIG in September. But soon after taking on that assignment, it became apparent that AIG needed more cash than the private markets could muster. That’s when the big guns, including then-Treasury secretary Henry Paulson, Jr., and then-New York Federal Reserve president Timothy Geithner, turned to Huebner.

And wouldn’t you know that Huebner’s former client, JPMorgan Chase, was one of the firms doing business with AIG. Here’s, former New York Gov. Eliot Spitzer warning the world about AIG’s backdoor payments 10 months ago.

And who were AIG’s trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.

No matter. The country at the time was preoccupied with $165 million in bonuses AIG was paying its executives. Who had time to worry about the bank-door transfer of more than $60 billion from the taxpayers to Goldman Sachs and JPMorgan?

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.