Wednesday, January 20, 2010

$62.1 billion paid by AIG to bank counterparties a "backdoor bailout"

" WASHINGTON, Jan 20 (Reuters) - U.S. Rep. Darrell Issa, the lawmaker investigating insurer AIG's payments to banks, said on Wednesday the Federal Reserve Bank of New York's submission of documents to a congressional committee is "incomplete."

In response to a subpoena, the New York Fed on Tuesday delivered over 250,000 pages of documents to the U.S. House of Representatives Oversight and Government Reform Committee relating to AIG's payments to credit default swap counterparties after its September 2008 bailout.

The panel is gearing up for a hearing next week into whether the New York Federal Reserve Bank improperly limited public disclosure on AIG's use of public funds to repay in full banks who bought its credit default swaps.

"Unfortunately, the document production is incomplete and not in full compliance with the committee's subpoena," Issa, a California Republican, wrote in a letter to Rep. Edolphus Towns, the New York Democrat who chairs the panel.

Lawmakers are angry at the Treasury Department and the Fed over the AIG bailout, which cost about $180 billion, and over bonuses paid to AIG executives."

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