Towns Subpoenas New York Fed Over AIG ‘Backdoor Bailout’
Rep. Edolphus Towns, chairman of the House Oversight and Government Reform Committee, will subpoena the New York Federal Reserve for documents related to the AIG bailout, the New York Democrat announced today.
The New York Fed has been under close scrutiny since last week, when it was revealed that the agency had asked AIG not to disclose payments it was making to other Wall Street giants after AIG had accepted tens of billions of dollars in federal bailout cash. Fed officials have argued that the decision to hide the payments was entirely in the hands of AIG lawyers. Yet internal emails show that those same lawyers wanted to report the transactions.
Treasury Secretary Tim Geithner was head of the Fed at the time.
The new subpoenas, Towns said in a statement Tuesday, ”will provide the Committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout.”
The hearing, for which Towns has asked Geithner to testify, is expected sometime next week.