Justicefor911.org legal complaint and petition to then-New York Attorney General Eliot Spitzer's representative in a press conference. Two weeks later, without having responded to our voluminous material offering, essentially, the full legal case for 9/11 prosecution, Spitzer announced he would run for Governor of New York. Of course, he won. But it would seem that speaking out against Bush (and now Obama) Administration bankers has not been good for his political health... This occasional tendency of his to spit in the face of authority is partly why we went to Spitzer in the first place. It is interesting to read his "outrageous" comments on the AIG scandal and see a tiny glimpse of what's actually behind the curtain in this whole sordid mess... We encourage you to have a look at Catherine Austin Fitts' Solari.com and Michael Ruppert's book, Crossing the Rubicon, for more of this kind of information. " />
Wednesday, March 18 2009 - Other Important News
The Real AIG Scandal
Why is this at 911truth.org? In 2004, after more than a year of significant work, we presented the Justicefor911.org legal complaint and petition to then-New York Attorney General Eliot Spitzer's representative in a press conference. Two weeks later, without having responded to our voluminous material offering, essentially, the full legal case for 9/11 prosecution, Spitzer announced he would run for Governor of New York. Of course, he won. But it would seem that speaking out against Bush (and now Obama) Administration bankers has not been good for his political health... This occasional tendency of his to spit in the face of authority is partly why we went to Spitzer in the first place. It is interesting to read his "outrageous" comments on the AIG scandal and see a tiny glimpse of what's actually behind the curtain in this whole sordid mess... We encourage you to have a look at Catherine Austin Fitts' Solari.com and Michael Ruppert's book, Crossing the Rubicon, for more of this kind of information.
It's not the bonuses. It's that AIG's counterparties are getting paid back in full.
By Eliot Spitzer
Tuesday, March 17, 2009
Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?
For the answer to this question, we need to go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall. Post-Lehman's collapse, they feared a systemic failure could be triggered by AIG's inability to pay the counterparties to all the sophisticated instruments AIG had sold. 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.
It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure. The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.
But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes--income taxes to sales taxes--to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars--that is, our dollars--flowed?
The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.
So here are several questions that should be answered, in public, under oath, to clear the air:
What was the precise conversation among Bernanke, Geithner, Paulson, and Blankfein that preceded the initial $80 billion grant?
Was it already known who the counterparties were and what the exposure was for each of the counterparties?
What did Goldman, and all the other counterparties, know about AIG's financial condition at the time they executed the swaps or other contracts? Had they done adequate due diligence to see whether they were buying real protection? And why shouldn't they bear a percentage of the risk of failure of their own counterparty?
What is the deeper relationship between Goldman and AIG? Didn't they almost merge a few years ago but did not because Goldman couldn't get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG's business model was not to pay on insurance it had issued.
Why weren't the counterparties immediately and fully disclosed?
Failure to answer these questions will feed the populist rage that is metastasizing very quickly. And it will raise basic questions about the competence of those who are supposedly guiding this economic policy.
Eliot Spitzer is the former governor of the state of New York.
Article URL: http://www.slate.com/id/2213942/
Eliot Spitzer published a scathing indictment of the Bush Administration via an editorial in the Washington Post just before his sexual escapades were made known, by the FBI, to the New York Times... read that editorial below.
And see this article, for one interesting analysis: Why Bush Watergated Eliot Spitzer, By F. William Engdahl, 17 March 2008
Predatory Lenders' Partner in Crime
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
Predatory lending was widely understood to present a looming national crisis.
This threat was so clear that as New York attorney general, I joined with
colleagues in the other 49 states in attempting to fill the void left by the
federal government. Individually, and together, state attorneys general of
both parties brought litigation or entered into settlements with many subprime
lenders that were engaged in predatory lending practices. Several state legislatures,
including New York's, enacted laws aimed at curbing such practices.
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.
When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.
The writer is governor of New York.
The views expressed in this article are the sole responsibility of the author, who is solely responsible for its content, and do not necessarily reflect those of 911Truth.org. 911Truth.org will not be responsible or liable for any inaccurate or incorrect statements contained in this article.