NY Fed Hit With Subpoena Over AIG Bailout

Rep. (Dem) Edolphus Towns, chairman of the House Oversight and Government Reform Committee, announced on Tuesday he will issue a subpoena to the New York Federal Reserve for documents related to the AIG bailout scandal.

Bloomberg: “To help the committee’s investigation of payments made by AIG to its counterparties, I am issuing a subpoena today to the Federal Reserve Bank of New York,” Representative Towns said in an e-mailed statement.

The committee is investigating the New York Fed’s suppression of details about American International Group (AIG) deals that sent billions of dollars to other Wall Street giants after AIG had accepted tens of billions of dollars in federal bailout cash.

Treasury Secretary Tim Geithner was President of the New York Fed at the time when decisions were made.

The new subpoena, Towns said in his statement Tuesday, ”will provide the Committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout.”