More Secret Money Went to Goldman
Kept secret by the U.S. government until today, Goldman Sachs borrowed $15 billion from the U.S. Federal Reserve on December 9, 2008 to stay afloat.
That was the largest sum taken that day by a coterie of 19 favored Wall Street and foreign banks in a furtive $80 billion capital infusion to the banks that created the crisis.
Today’s astonishing disclosure, and the strenuous efforts of officials to keep it quiet for nearly three years, raises still more questions about the integrity of the government kingpins who called the shots during the financial crisis of 2008.
Especially compromised are Henry Paulson, Goldman’s former CEO who ran the U.S. Treasury at the time, and his chief lieutenant, Tim Geithner, who has run the U.S. Treasury since.
The duo’s most questionable deed was the unlawful seizure of American International Group in September 2008. After paying mere pennies on the dollar for the company, they then used it as a secret funnel to move more than $50 billion of government money to the same coterie of banks, with Goldman again the largest beneficiary.
The two government officials managed to keep that clandestine operation secret for months, until Congress and the press pried it out of them.
Today’s news reveals more of the same, sweetheart funding of favored banks, led by Goldman, in a deal kept hidden from public view, this time for nearly three years. Congress has repeatedly sought clear answers from Secretary Geithner about his role in the crisis and consistency has not been his hallmark.
Today’s revelations, reported about a half hour ago by Bloomberg News in response to a Freedom of Information Request, could bring Geithner back before Congress or, more likely, add pressure for Geithner to resign.
Meanwhile, Americans must continue to hold officials accountable for their actions, especially for conduct like this rooted in illegal and corrupt behavior.