Word: geithner
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Treasury Secretary Tim Geithner had every reason to think he had seen all of AIG's dirty laundry. The government owned 80% of the company, and Geithner had just orchestrated AIG's most recent handout - its fourth, if you are keeping score, for $30 billion on March 2 - to prevent the teetering insurance giant from going over the cliff and taking the rest of the global financial system with it. AIG had already cost the taxpayers some $170 billion, mostly to repair the damage done by one of its units, AIG Financial Products (AIG FP), which last year alone piled...
...Then Geithner's staff made the discovery that would infuriate nearly everyone in Washington. On March 10, the Secretary learned, 10 days after his staff first got wind of it, that AIG had paid out $165 million in retention bonuses to executives at the unit that compelled the U.S. to bail out the company in the first place. It took Geithner until 7:40 the next night to place what must have been a tense phone call to AIG's newish CEO, Ed Liddy. The bonuses were not tenable; they had to be canceled, he demanded. Liddy, a dollar...
...word of the day was well established by Tuesday evening, when Treasury Secretary Timothy Geithner wrote a letter to Senate majority leader Harry Reid. "I know," began the embattled Geithner, "that there is considerable outrage in the Senate, as there is throughout the country, about the bonuses." Indeed, outrage was the theme of politician, pundit and President of the United States at each new revelation about the bonuses paid out of federal bailout money to AIG executives. There was so much outrage, in fact, that furious red overtook St. Patrick's green as the color...
Since it will take time to get at AIG and those taxpayer dollars turned bonuses, the most immediate target of outrage (next to Liddy, who's due for a tongue-lashing in congressional testimony on Wednesday) may have to be Geithner. In his letter to Reid, Geithner said the Administration was still looking for legal ways to get the money back (as Obama has loudly demanded). He reiterated his own outrage when he confronted Liddy about the bonuses and declared that the government would force AIG to repay the Treasury from the operations of the company, in addition to deducting...
...didn't the Secretary of the Treasury, with all the resources of a government department at his command, know about it until Mar. 10, according to a White House time line? If it was simple ineptitude, it has nevertheless cost his boss, the President, considerable political and popular embarrassment. Geithner's job security may lie in the fact that the White House needs someone - anyone - with the right credentials to run the financial ship amid this storm. But adrift in an angry sea, Geithner is increasingly a troubled asset himself...