Treasury Secretary Timothy Geithner came under increased scrutiny Tuesday when a key congressman said he would subpoena the Federal Reserve Bank of New York about bailout decisions made on Geithner's watch.

Rep. Edolphus Towns, D-N.Y., said Tuesday he will subpoena the New York Fed for documents related to the bailout of failed insurer American International Group Inc.

Towns chairs the House Oversight and Government Reform Committee. The committee is investigating deals that diverted billions of AIG bailout dollars to banks including Goldman Sachs Group Inc.

The committee has been investigating e-mails from New York Fed lawyers telling AIG not to disclose details about the deal. The e-mails were released last week by California Rep. Darrell Issa., the committee's top Republican.

Issa asked Towns to subpoena the New York Fed after the Fed blocked a separate request for documents.

In a statement Tuesday, Towns said the subpoena will "shed light on how and why taxpayer dollars were used for a backdoor bailout."

The "backdoor bailout" refers to money being funneled to banks including Goldman, Societe Generale and Deutsche Bank.

Geithner's Got To Go

Inquiring minds are listening to Aaron Task and 7u Henry Blodget give More Reasons Why Geithner's Got to Go.

The latest revelations about the New York Fed's actions in the AIG bailout make one thing clear: Treasury Secretary Tim Geithner must go.

Geithner must go not just because of the emails showing that his New York Fed ordered AIG to keep details of the bailout secret, but because of many other decisions and policies he has championed in the past two years.

These decisions and policies have consistently put the interests of Wall Street ahead of the interests of the taxpayer, and they have undermined the public's confidence in the government at a time when the country needs it the most.

Tim Geithner's defense of his actions continues to be, in effect, "We had to do it or the world would have ended." This isn't good enough. It is also, at the very least, debatable. ....

Contrary to the revisionist history now being promulgated, these [Geithner's] actions were not the only way out. They were grossly unfair to taxpayers, and they have undermined public confidence in the government--and our current President--at a time when the country needs it most.

Henry Blodget, Aaron Task Too Kind

Nice segment guys, but you were too kind.

The actions of Geithner, Paulson, Lewis, and Bernanke are criminal and I said so on January 7 in Time To Indict Geithner For Securities Fraud.

The web of known parties guilty of fraud, coercion, or securities manipulation keeps getting bigger. Please consider N.Y. Fed Told A.I.G. Not to Disclose Swap Details.

I am 100% in favor of allowing Geithner to defend himself ... In a court of law, for securities fraud.

And as I have stated before Paulson, Bernanke, and Bank of America ex-CEO Lewis as well.

April 24, 2009: Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis

July 17, 2009: Paulson Admits Coercion; Where are the Indictments?

October 20, 2009: Bernanke Guilty of Coercion and Market Manipulation

While you are wondering where the indictments are perhaps you may wish to review Where The Hell Is The Outrage?

Geithner's "we had no choice" defense is not only a revisionist lie, it is irrelevant as a defense.

Geither is not above the law. He sounds just like Richard Nixon in his "I am not a crook" speech and again in an Interview With David Frost "When the president does it that means that it is not illegal."

As I have said already, I am all in favor of Geithner being allowed to try whatever defense he wants, in a court of law on charges of securities manipulation and securities fraud.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

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