When the Federal Reserve in Washington and the New York Federal Reserve Board forced AIG to pay 100 cents on the dollar of each of the Credit Default Swaps AIG issued to Goldman Sachs, Deutsche Bank and Merrill Lynch, the Fed also required AIG to give them a waiver that AIG would never sue them to get the money back. See Louise Story and Gretchen Morgenson, "Documents on Bailout of A.I.G. Show How Big Banks Benefited" p. A1, col. 1 (New York Times Nat'l ed., Wed., June 30, 2010).
The existence of AIG's waiver, which also binds parties who "stand in the shoes" of AIG, i.e., the people who succeed to AIG's rights such as you and me and other Taxpayers in America, was not previously disclosed. Not by Goldman, nor by Deutsche Bank, nor by Merrill Lynch. Nor by the Fed. Nor by AIG, which was apparently also required to keep the waiver a secret from you and me and other Taxpayers in America.
The waiver itself was produced among many, many pages of documents in response only to a Congressional subpoena issued earlier this year:
It was not until a Congressional committee issued a subpoena in January that the New York Fed finally turned over more comprehensive records. The bulk remained private until May, when some committee staff members put them online, saying they lacked the resources to review them all.
Louise Story and Gretchen Morgenson, New York Times June 30, 2010, supra.
Dumping thousands of irrelevant documents along with a few pages of relevant production appears to be a frequently used tactic. See "Delay, Disrupt and Dismay: Goldman Sachs and Its Lawyers Respond ... Dump Documents, May Overwhelm Financial Crisis Inquiry Commission," posted here on June 11, 2010.
It is clear however that AIG's waiver was good for Goldman, good for Deutsche Bank, and good for Merrill.
Who told you that AIG's waiver was good for AIG, or for you, or for me, or for any other American taxpayer?
If it had been, they would all have told everyone who would listen. They did not.
Disclosure of secrets which, if kept secret will or may cause injury to other people, is compelled by Law in certain circumstances in many States, including Florida. Fla. Stat. ยง 69.081. Disclosure is almost always a better policy choice than secrecy when it comes to the payment of money or, in this instance, waiving other people's rights to get that money back.
Some Questions:
Can AIG's waiver include a waiver of all causes of action to redress fraud against it by those that received AIG's waiver?
Would it include all causes of action for Breach of Fiduciary Duties and Fair Dealing?
There are many other questions, including who received the benefits and immunities arguably conferred by AIG's waiver, who asked for it, and why was it given. The linked newspaper article reflects that the documents disclosed so far do not reflect answers, yet, to any other questions such as these.
AIG's waiver must be examined by independent lawyers. Then some of these and other similar questions can begin to be addressed. And until then, a word of advice:
"Pay no attention to the man behind the curtain." Those that kept AIG's waiver a secret are not to be heard now as to why it should not be further disclosed.
Please Read The Disclaimer.
Comments