SEC Helped AIG Hide PassThru Bailouts to GS, others

The latest WTF?!? news to come out of the swamp that is Washington, D.C. is this tidbit of official government incompetence and opaqueness:

The SEC, working hand in glove with AIG, agreed to keep bailout terms sealed, including information on the pass thru to counter parties such as Goldman Sachs at 100 cents on the dollar. This SEC granted “confidential treatment” was agreed to last May, and a “secrecy order” (WTF is that?) will stay in place until November 2018.

“It could take until November 2018 to get the full story behind the U.S. bailout of insurance giant American International Group (AIG.N) because of an action taken last year by the Securities and Exchange Commission.

In May, the SEC approved a request by AIG to keep secret an exhibit to a year-old regulatory filing that includes some of the details on the most controversial aspect of the AIG bailout: the funneling of tens of billions of dollars to big banks like Societe Generale, Goldman Sachs (GS.N), Deutsche Bank (DBKGn.DE) and Merrill Lynch.

The SEC’s Division of Corporation Finance, in granting AIG’s request for confidential treatment, said the “excluded information” will not be made public until Nov. 25, 2018, according to a copy of the agency’s May 22 order.

An SEC spokesman declined to comment when Reuters asked about the order.

Quite bluntly, it is astonishing that the SEC agreed to this. We are not discussing a typical SEC for confidential treatment — they receive ~1,500 if those to protect trade secrets, and grant 95% of these.

This is not one of those instances — no patents, no technological innovations or new drug molecules. Instead, this was a case of an insolvent insurer receiving 100s of billions of dollars in taxpayer monies, who then used the government’s regulatory agency to hide where the proceeds of the public went — from the same public who wrote the checks. This is the latest outrage in a series of outrages.

I’m no expert in constitutional law, but I would imagine that a President — especially one that campaigned on transparency in government —  could override this shameful exercise in douchebaggery.

I continue to wonder if anyone in DC has the slightest clue WTF the they are doing. I was sick to death of the sheer willful anti-science, anti-logic ignorance of the Bush administration. I hoped that the new guys will be less overt hostile to the public, less secretive, more respectful that this is — or at least used to be — a Democracy. The stupiditiy of the Bush administration has been replaced by a new flavor of ignorance — the cluelessness of the Obama team. We might as well have given W a 3rd term, given the outrageous and embarrassing decision making we have witnessed so far.

Change we can believe? More like “4 more years.” Color me nauseous.

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Source:
SEC order helps maintain AIG bailout mystery
Matthew Goldstein
Reuters, Jan 11, 2010
http://www.reuters.com/article/idUSN1116982020100111