Neil Barofsky, special inspector general for the Troubled Asset Relief Program (TARP), is investigating how the New York Federal Reserve Bank handled AIG’s bailout.
And he told Bloomberg that his search into whether New York Fed officials covered up details of the September 2008 rescue could end in criminal or civil charges.
That’s not good news for Treasury Secretary Timothy Geithner, who was president of the New York Fed at the time.
Barofsky already has criticized Geithner for his handling of AIG’s collapse.
Too many details of the deal were kept hidden from the public, the watch dog says.
He told Congress that his office will investigate seven AIG-linked mortgage securities similar to the one underwritten by Goldman Sachs that got it into trouble with the Securities and Exchange Commission (SEC).
“I’ve been in contact with the SEC,” Barofsky told the Senate Finance Committee, according to Bloomberg.
“We’re going to coordinate with them, but we’re going to lead the charge. We’re going to review these transactions.”
In addition to AIG, Barofsky and Geithner’s offices have fought over the administration of TARP funds and even over who is Barofsky’s boss.
Many experts are critical of the relationship between AIG and Goldman.
“Without the AIG bailout, Goldman Sachs would have collapsed as a result of its own (derivatives) scam. So Hank Paulson, not John Paulson, should be the ultimate target of this (SEC) investigation,” David DeGraw writes on GlobalResearch.ca.
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