Time magazine is reporting that Treasury Secretary Tim Geithner may have misled Congress in his testimony about the AIG bonuses yesterday.
Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG’s impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is 10 days before Treasury staffers say they first learned “full details” of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.
“Treasury staff was informed about the new bonuses in a Feb. 28 memo that the March 15 [bonus-payment] date was upcoming,” a Federal Reserve source tells TIME. A Treasury Department source, speaking on background, confirmed the e-mail memo and its contents, saying, “Everybody knew that [AIG] had a retention issue.”
Of course, there’s already an innocent–or nearly innocent–explanation being put forward. You already know what it is: they’re pinning the blame on some low level staffer. Blame rolls downhill in Washington, DC, and the buck never stops at the top. In this case, people are saying that Geithner never got the message perhaps because he lacks the proper level of staffing.
This could be a hugely explosive issue. If Geithner did get the message–something that should be easily traceable by looking at Geithner’s emails–then we expect calls for his removal. But the Obama administration could well stymie any investigation into this by claiming that executive privilege protects Geithner’s emails from being examined by Congress.
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