Tuesday, January 19, 2010
The Associated Press reports that Fed Chief Ben Bernanke is warming up to the whole idea of allowing a little more light to shine on the AIG bailout that was foist upon the country back in late-2008, going so far as to pen this letter to the GAO requesting an investigation.
Federal Reserve Chairman Ben Bernanke took the unusual step Tuesday of asking Congress' investigative arm to conduct a "full review" of the Fed's role in bailing out insurance giant American International Group.In the letter, Bernanke states that the government will be paid back in full by September 2013, five years after the bail-out. If I were Congress or the GAO, that's the first piece of data I'd ask to see - how could they possibly pay back everything by then?
The Fed chief's move is aimed at defusing criticism of the government's $182 billion rescue. The bailout sparked public outrage and demands in Congress for more information, especially after it was revealed that millions in bonuses would go to employees in the AIG division most responsible for the company's need for a bailout.
The House Committee on Oversight and Government Reform has a probe under way that seeks to provide a fuller picture of the AIG bailout. Those lawmakers are especially interested in details involving billions in payments AIG made to Goldman Sachs and other Wall Street firms that did business with the insurer. Some lawmakers want to know why those firms were fully paid and why concessions weren't demanded.
"To provide a comprehensive response to questions that have been raised by members of Congress, the Federal Reserve would welcome a full review by GAO of all aspects of our involvement" in the AIG bailout," Bernanke wrote in a letter to the Government Accountability Office, the investigative arm of Congress.
Isn't AIG just like GM? A big black hole into which the government pours money?