Report Says New York Fed Didn’t Cut Deals on A.I.G. as Promised

There is only one problem with this statement below, the head of the Federal Reserve Bank of New York at the time  and his people lied as they said they were negotiating settlements with 16 AIG creditors which dropped to eight (8) and then only four (4) were contacted to negotiate a settlement which never happened.

The bank said in a statement Monday that it had “put together an effective lending program that minimized disruption to the economy from A.I.G. while safeguarding the taxpayer interest.” 

The NY Fed, headed by now Secretary of the Treasury, Timothy Geithner, paid full price for the AIG debt and did not negotiate a settlement for the American Taxpayers.  Is this why Geithner wanted out as Treasury Secretary as he knew the results of the investigation would be coming out?  Would suggest that Mr. Geithner's resignation now be accepted with this investigation showing he lied about the negotiations or is this one of those "I didn't know moments" that is going around with government officials and candidates now.

Once again the taxpayers got the short end of the stick thanks to the NY Fed and too big to fail mentality! 

Report Says New York Fed Didn’t Cut Deals on A.I.G.
By BINYAMIN APPELBAUMPublished: October 31, 2011 

WASHINGTON — The findings of a federal investigation released Monday raised new questions about the Federal Reserve Bank of New York’s handling of the 2008 bailout of American International Group.  

The report, by the Government Accountability Office, says that New York Fed officials have offered inconsistent explanations for their decision to pay other financial companies the full amounts they were owed by A.I.G., and that some of the explanations were contradicted by other evidence.  

The report also asserts that the decision to pay the full amounts, rather than seeking concessions as the government later did in other cases, disregarded the expectations of senior Fed officials in Washington and the expressed willingness of some of the companies to accept smaller payments.  

In one case, when a company offered to accept a smaller amount of money, officials at the New York Fed responded that they had decided to pay the full amount of the debt, the report said.
The agency’s report revisits a controversial chapter in the history of the financial crisis: the government’s decision to sink tens of billions of dollars into A.I.G., the world’s largest insurance company, which was running out of money to cover its vast and losing bets on the health of the housing market. Much of that money was then paid to other companies to honor their outstanding contracts with A.I.G.  

The basic conclusion echoes the findings of previous federal investigations. The rescue mission succeeded, but efforts to minimize the costs and risks borne by taxpayers were insufficient. But the new report also raises concerns about the explanations subsequently offered by New York Fed officials.  

For example, the G.A.O. says that officials at first told its investigators that they had initiated discussions about possible concessions with most of the 16 companies that stood on the other side of insurance-like contracts, called credit-default swaps, with A.I.G.  

Then, according to the report, the officials said they had contacted eight companies before abandoning the effort. Even then, the report said, only four of those companies confirmed that they had been contacted by the Fed.

The New York Fed declined to comment on the specific account of the negotiations. Officials of the bank, including Timothy F. Geithner, then the president of the New York Fed and now the Treasury secretary, have testified that they needed to act quickly to prevent greater damage to the financial system, and that they chose the approach that was most likely to succeed and easiest to enact.  

Source:  New York Times

Frank Gaffney: Obama's 'Teachable' Shariah Moment

We had not planned to do another story on AIG or Obama and the Islamic religion today but this email arrived from Frank Gaffney and after the shock wore off, we decided it is time that the American people learn the truth about Obama. The media cover-up for Obama has to end immediately. If the American people elected a Muslim Arab American President, we have a right to know.

As a follow-up to the AIG story we posted earlier today on this site, we learn this from the Center for Security Policy:

There is much more yet to be learned, of course. For example: Why is the U.S. government promoting the Brotherhood's effort to penetrate our capital markets via "shariah-compliant finance," including its direct ownership of a huge player in that field, AIG? Which other shariah-adherent Muslims are getting their expenses paid by the State Department as they network around the globe on behalf of their seditious agenda? How much is this outrageous program costing, and what does Foggy Bottom have to show for it? Why did Team Obama cosponsor a UN resolution last Fall imposing "shariah blasphemy" laws that utterly conflict with the First Amendment's protection of free speech?

What else don't we know about what this Administration is doing trying to import Shariah Law into the United States? How many people knew about the Obama Team resolution at the United Nationsl imposing "shariah blasphemy" laws that conflict with the First Amendment's protection of free speech? Already were stunned about AIG but now are totally blown away by the fact that the Muslim Brotherhood owns them.

Gaffney is correct that the speech of Obama Friday night for Ramadan may be the best thing that has happened as it has woken a lot of Americans up to what Obama is doing. We first thought that George Soros was the puppetmaster but have had to revise our thoughts to it is the Muslim Brotherhood pushing Obama. All the evidence points to the fact that Obama is Muslim. Look at his history --

Born to a father who was a member of the Luo tribe in Kenya, was Muslim, but had no influence on Obama's daily life. This made Obama 50% white, 44% Luo, and 6% black. Today Obama has relatives in Kenya who support radical Islam and he supported one for President of Kenya,

Raised by a stepfather who had him attend an Islamic Mosque in Indonesia on a regular basis and at the Catholic School took classes in Islam,

Mentored in high school in Hawaii by Communist Franklin Marshall Davis who introduced him into Chicago politics where Obama became friends with Nation of Islam members in Chicago including Louis Farrakhan along with domestic terrorists from The Weather Underground,

Attended Rev Wright's Church which was nothing but a front for Muslims wanting to use attending a Christian Church as a front to fool people in business. Sat in church for 23 years listening to Rev Wright, a former Muslim, preach black separatism.

Recited the Islamic prayer in the Islamic dialect in an interview and then had to be corrected on ABC when he said "I am a Muslim" by the anchor to "Christian"

The signs were all there so that no one should have been shocked at his speech from Cairo to the Muslim nations where he requested the Muslim Brotherhood be in attendance, but we were. His bowing to the Saudi King put more doubts in our minds as the American President does not bow. His attitude toward the the Muslim at Fort Hood who killed all those people in the name of Allah or the Christmas Day bomber, or bringing 9/11 terrorist mastermind to NYC to be tried in the shadow of the World Trade Centers all point to the fact he supports Muslims over Christians and Jews.

Where is the national media and their so-called investigative reporting? Attending White House lunches 'off the record' or is their liberal, progressive agenda overruling their investigative journalism as they thought he was one of them. They were wrong and should stand up and apologize to the American people for covering up who they knew Obama to be -- The First Arab American President with family ties to radical Islam. Why wasn't there more reporting when Obama interfered in the election in Kenya on behalf of his radical cousin Odinga who lead riots after losing the election?

Believe all doubt is erased and Obama, the first Arab American President, is Muslim.

Obama's 'Teachable' Shariah MomentCenter for Security Policy Aug 16, 2010
By Frank Gaffney, Jr.

On Friday night, Barack Obama gave his full-throated endorsement to a mosque and "cultural center" on private property that has been purchased in Lower Manhattan adjacent to the site where the World Trade Center's twin towers once stood. By Saturday, however, he wanted the American people to know that he was not commenting on "the wisdom" of putting such a mosque by that hallowed ground - just "the right" of its backers like Imam Feisal Abdul Rauf to do it, pursuant to the Constitution's protection of religious freedom.

Unfortunately for the President - but fortunately for the country - it is too late for such ludicrous contortions and dissembling. However much Mr. Obama and his fellow Democrats now regret his original White House statement, it has created a "teachable moment." Not just about the Ground Zero mosque but about the larger enterprise it is intended to serve: bringing the law of Saudi Arabia and Iran, shariah, to America.

Imam Rauf makes no bones about that being his purpose. So do some of his most prominent backers, like the Muslim Brotherhood front, the Council on American Islamic Relations (CAIR), and the Brotherhood's Palestinian franchise, the designated terrorist group Hamas. In fact, according to the New York Post, on Sunday, Mahmoud al-Zahar, an Hamas co-founder and leader in Gaza, told WABC Radio host Aaron Klein: "We have to build the mosque [at Ground Zero]. We have to build everywhere. In every area we have [as] Muslim[s], we have to pray and this mosque is the only site of prayer."

Al-Zahar also enthused about shariah, calling it the "tradition of Islam" which "is controlling every source of our life as regards to marriage, divorce, our commercial relations." He added ominously that, "Even the Islamic people or Muslims in [the United States] are living now in the tradition of Islam."

What else have we learned so far from Mr. Obama's teachable shariah moment? We now know that the President is willing to associate with members of the Muslim Brotherhood (MB), not just in Cairo - where he insisted they be invited to hear his famous paean to Islam last year - but in the White House. For example, leaders of known MB front groups like Ingrid Mattson of the Islamic Society of North America and Salam al-Marayati of the Muslim Public Affairs Council were in the company at the Iftar dinner Friday when Mr. Obama fervently embraced the Ground Zero mosque.

This is an important insight since we know from uncontested evidence submitted by the government in the largest terrorism finance trial in U.S. history - the Holy Land Foundation case - that the Muslim Brotherhood's mission in America is "destroying Western civilization from within and ‘sabotaging' its miserable house by their hands and the hands of the believers so that it is eliminated and God's religion is made victorious over all other religions."

What on earth is the President of the United States doing fraternizing with, and thereby legitimating, operatives of an organization with such a seditious mission - to say nothing of endorsing their most immediate priority: the Ground Zero Mosque?

We have also learned that the Obama administration insists that Imam Rauf, another Brotherhood apparatchik, is a "moderate." Never mind the abundant evidence to the contrary - not least his statement that he wants to bring shariah to America. Believing him to be a good "ambassador" for the United States, the Obama-Hillary Clinton State Department has gone so far as to send Rauf on a taxpayer-funded trip to Arab capitals. While there, he will surely try to parlay the President of the United States' explicit endorsement of his Ground Zero project and sponsorship of his travels into funding from oil-rich promoters of shariah to build his 13-story, $100 million megamosque within spitting distance of some of America's most hallowed real estate.

(snip)

As he hosted the Ramadan fast-breaking dinner at the White House on Friday, President Obama showed his true colors on shariah. Trying to dress up the Ground Zero mosque or any other aspect of this brutally repressive, totalitarian and inherently unconstitutional program as a matter of "religious freedom" does not pass the giggle test. Shariah is about power, not faith, and no amount of Obama subsidies, solidarity or spin on behalf of that agenda will persuade the American people to allow the so-called "tradition of Islam" to supplant our civil liberties, form of government and way of life.

Read More from Frank Gaffney at: Center for Security Policy

Andrew C. McCarthy: American Taxpayer, Financial Jihadist

"Thanks to our takeover of AIG, we now are involved in Islamic finance."

That first sentence of the article hit like a ton of bricks after Obama's endorsement of the near Ground Zero Islamic Mosque on Friday night.

When is the national media going to cover Obama as the first Arab American President and the fact that he supports Muslims whose religion is Islam over the United States? If it is not clear now, it never will be. The speech to the Muslim world, the bowing to the Saudi King, and the list goes on so guess we should not be shocked by this revelation on AIG but frankly we are stunned!

Andrew C. McCarthy
August 14, 2010 4:00 A.M.

American Taxpayer, Financial Jihadist

Thanks to our takeover of AIG, we now are involved in Islamic finance.

It is “financial jihad,” explained Yusuf Qaradawi, the Muslim Brotherhood’s sharia compass — and the man Feisal Rauf, the brains behind the proposed Ground Zero mosque, admires as “the most well-known legal authority in the whole Muslim world today.” It was 2002 and Qaradawi, who endorses suicide bombing and the targeting of American personnel operating in Islamic countries, was giving a lecture on the need to use the international financial system to support Islamist goals — like Hamas’s war to destroy Israel.

The financial jihad has now achieved its greatest coup so far: It has co-opted the U.S. government as a partner. In fact, if you would like to see a contributor to the jihad, have a look in the mirror. Thanks to the Obama administration, every one of us is complicit. The bailout bonanza made each of us an owner of American Insurance Group (AIG). Under the stewardship of its real CEO, Treasury Secretary Timothy Geithner, AIG proudly runs the world’s most lavishly funded sharia-compliant insurance business — and it is desperately trying to convince a federal court in Michigan that no one should have a problem with that.

Sharia-compliant finance (SCF) is now a thriving American industry. Sharia is Islam’s authoritarian legal framework. It aspires to control not merely spiritual life but all aspects of society, including economic matters. The purpose of SCF is to advance that mission in two important ways.

First, SCF legitimizes the incorporation of sharia into our legal system, despite the fact that many features of Islamic law are anti-constitutional. That is, once sharia governance is accepted in principle, Islamists shrewdly figure the skids are greased for imposing sharia tenets on other aspects of our national life (e.g., domestic relations, employment matters, criminal law, etc.). Second, because sharia is a discriminatory system, SCF promotes Islamist ideology and enriches Muslims at the expense of non-Muslims by controlling investments and “purging” interest.

Companies that practice SCF, including AIG, retain advisory boards of sharia experts. These boards, which often include Islamist ideologues, tell the companies which investments are permissible (halal) and which are not (haram). AIG’s “Shariah Supervisory Committee” includes a Pakistani named Imran Ashraf Usmani, who is the son and student of Taqi Usmani, a top cleric (a “mufti”) and a globally renowned sharia-finance authority. The mufti is author of a book that features a chapter urging Muslims in the West to engage in jihad against the countries in which they live.

In the insurance business, those who purchase policies pay premiums, which insurers like AIG then invest. To be sharia-compliant, investments must not be made in enterprises Islam forbids, e.g., finance (because it makes money off interest, which sharia prohibits), pork, gambling, alcohol, etc. Sounds harmless enough . . . except forbidden enterprises would also include businesses that support or otherwise work with the U.S. armed forces. Islamists consider our military to be an “infidel force” that is “at war with Islam.”

Because sharia bars interest (although it permits “profits” that Islamic authorities, in their infinite wisdom, deem reasonable), SCF requires that investments be constantly monitored and that any interest payments be purged. This is done by skimming off a percentage that is then channeled — at the direction of the advisory board — to an Islamic “charity.” Of course, as no one knows better than the Treasury Department, many such charities are merely fronts for the financing of terrorist organizations. This is not an accident. When Sheikh Qaradawi speaks of “financial jihad” as an Islamic obligation, he’s not kidding: In Islamist ideology, funding those who “fight in Allah’s cause” — e.g., Hamas — is one of the eight categories of permissible zakat, the Muslim obligation of almsgiving.

So, an American company that practices SCF is, wittingly or not, advancing the jihadist agenda: It will deny financing to enterprises that help our military combat terrorists while running the risk that its sharia advisers will steer funding to those same terrorists. That aside, the portrayal by President Obama and others of zakat as “charitable giving” is a misconception. According to the most influential Islamic authorities, zakat can be given only to Muslims. It is not an extension of one’s hand to the world’s most needy; it is an insular duty to fortify the ummah, the notional Islamic nation. Consequently, the purging of interest is nothing more than a redistribution of wealth from non-Muslims to Muslims.

Read More at: National Review

Subprime Lending Crises including Barack Obama's Involvement in the 90's (Part 3 - AIG, Goldman-Sachs)

Now fast forward to 2007-08-09, when (1) Goldman Sachs bets its portfolio of Liar Loans against the short-traders then-coordinating the Obama campaign from within the Bush Treasury Dept, (2) sabotages the McCain campaign from within the Bush Treasury Dept, (3) hoodwinks George Bush into signing the TARP, (4) receives tens of billions of dollars stolen from the American taxpayer, (5) that they launder through AIG, (6) emerges from the collapse of the markets as the dominant force in NYSE program trading, and, (7) transforms $tens of billions of dollars [stolen from the American taxpayer] into record bonus payouts in the middle of the worst economic crisis since the Great Depression.

GOLDMAN BIG DEFENDS $12.9B PAID BY AIG By KAJA WHITEHOUSE, NY POST, March 21, 2009

Despite catching flack for having accepted $12.9 billion in taxpayer funds as payment for bets it made with beleaguered insurance giant American International Group, officials at Goldman Sachs were unapologetic, saying the payday was strictly business and aboveboard.

"We don't think we did anything wrong," Goldman's Chief Financial Officer David Viniar said in a conference call with reporters. "We had commercial terms. It is our responsibility to our shareholders to make sure that we are protecting ourselves. That's why we enter into these contracts."

Goldman set up the call to "clarify certain misperceptions in the press" around the bank's vulnerability to an AIG collapse. The Wall Street bank was largely successful in soothing those concerns, as Viniar explained how, despite a $20 billion derivative exposure to AIG as early as September, Goldman had set things up so that it could walk away largely unscathed had AIG gone bust.

Since July 2007, Goldman Sachs has spent around $100 million hedging against the risk of default in its AIG derivatives, said Goldman spokesman Lucas van Praag. But in soothing concerns over its exposure to AIG, Goldman officials opened another can of worms namely, why the firm was made whole on its bets, given AIG's troubled financial health and given that Goldman was so well-protected against default.

AIG has come under fire amid revelations that $90 billion of the government funds it received were funneled to its trading counterparties, whose contracts were largely bought out at face value. Goldman was the largest single beneficiary of the funds.

"I think the question is why did the Treasury not demand that Goldman Sachs and AIG negotiate down the collateral agreements on CDS?" said James Kaufman, a former Wall Street banker with Lazard Freres, referring to derivatives known as credit-default swaps. "If we had taken a discount, then we would have taken a loss to Goldman Sachs, and, frankly, as I'm sure you know, we also have taxpayer money at Goldman Sachs," Viniar said. Goldman got $10 billion as part of the Troubled Asset Relief Program.

Viniar also downplayed the notion that Goldman Sachs CEO Lloyd Blankfein had the ear of then-Treasury Secretary Hank Paulson, who was Blankfein's predecessor at Goldman.

Even before AIG became a government-owned enterprise, Goldman had already persuaded the company to pay it $7.5 billion in cash collateral as a result of the waning value of the assets tied to its derivative contracts.

After AIG was bailed out, Goldman received another $2.5 billion in cash collateral, plus $5.6 billion in payments made to unwind its contracts with AIG. Goldman said its remaining derivative exposure to AIG sits at around $7 billion, to which it's received $4.4 billion in collateral.

SOURCE: http://www.nypost.com/seven/03212009/business/goldman_big_defends_12_9b_paid_by_aig_160547.htm