When he was asked about AIG’s bonus program when it became a scandal, Geithner simply lied about it:

As American International Group chief executive Edward M. Liddy returns to Washington to face Congress today, new details are emerging about how long federal officials were aware of the company’s recent bonus payments to its executives and of how inflammatory the payments could be.

Documents show that senior officials at the Federal Reserve Bank of New York received details about the bonuses more than five months before the firestorm erupted and were deeply engaged with AIG as well as outside lawyers, auditors and public relations firms about the potential controversy. But the New York Fed did not raise the alarm with the Obama administration until the end of February.

(emphasis mine)

The post does note that, “his [Geithner’s] name is not among those of senior New York Fed officials mentioned in the summaries of phone calls, correspondence and other documents obtained by The Washington Post,” but this makes him either a liar, willfully blind, or unconscionably incompetent.

It is crap like this which has led Edolphus Towns (D-NY-10) to call for supervision of AIG to be removed from the New York Bank of the Federal Reserve and moved to a government agency.

Right now these trustees answer to the NY Fed.

It makes sense. The Federal Reserve in general, and the New York Fed in particular, are textbook cases of “regulatory capture“, and what’s more, they are secretive, and opaque.

It does not help that the New York Fed is owned by the banks it is charged to regulate too.

As to AIG CEO Liddy’s testimony today that AIG would pay back the money in 5 years. That’s just a bald faced lie.