Ontario Global Research

The mechanisms of secrecy

Mechanism of GY Consulting


Mr. Liddy, a former C.E.O. of Allstate, had been a member of the board of Goldman Sachs since 2003 and head of its audit committee since 2007. He held “a considerable amount of Goldman stock” when the bailout took place, testimony shows.

It was well known before the trial that Henry M. Paulson Jr., a former chief executive at Goldman who was the Treasury secretary at the time, was instrumental in hiring Mr. Liddy for the A.I.G. post. But the extensive involvement by other current and former Goldman executives in his selection was not.

This involvement was remarkable: Goldman, after all, was one of A.I.G.’s largest trading partners and one of the biggest beneficiaries of the insurer’s bailout. Goldman received $13 billion when the New York Fed, under Timothy F. Geithner, paid A.I.G.’s trading partners in full on credit insurance they had bought from it.

According to Mr. Liddy’s testimony, Chris Cole, co-chairman of Goldman’s investment banking unit, was the first to contact him about the A.I.G. job. Mr. Cole was working on a private-sector rescue of A.I.G. and called Mr. Liddy the morning of Sept. 16, 2008.

Later that day, testimony shows, Ken Wilson, Goldman’s former vice chairman and an adviser to Mr. Paulson at the Treasury, repeated the offer to Mr. Liddy. He accepted it. Mr. Paulson then telephoned Mr. Liddy around 3 p.m. to discuss the matter.

That evening, the bailout was completed at the New York Fed.

Early on Sept. 17, Mr. Liddy met with Dan Jester, another former Goldman executive advising Mr. Paulson at the Treasury. A Sept. 17 email from Mr. Cole to a Goldman colleague indicates that he had met with Mr. Liddy for four hours.“Getting him prepped for his first day on the job,” Mr. Cole wrote. “His chin strap is fastened.”

At the trial, Mr. Liddy testified that he didn’t recall meeting with Mr. Cole. A spokesman for Mr. Cole said last week that he declined to comment.

Mr. Liddy was appointed A.I.G.’s chief executive on Sept. 18. But he remained a Goldman director until Sept. 23, and he testified that he attended a Goldman board meeting by telephone on Sept. 21. At that meeting, the company’s directors voted to become a bank holding company to receive additional government support.

Later that evening, Mr. Liddy led an A.I.G. board meeting, notes produced at trial show. He urged the insurer’s directors to accept the government’s costly bailout because it “was not going to come to the aid of other troubled issuers and turmoil was expected,” the notes state.

Last week, Edward Kane, a finance professor at Boston College and an expert on financial regulatory failures, said, “We’ve learned so much from this case that everyone wanted to cover up.” Mr. Kane said that while he is not on Starr’s side in the litigation, the facts that it has surfaced are important for citizens to understand.

“These are the equivalent of storm troopers marching in and throwing their weight around and telling lies about it afterward,” he said. “The lawsuit is an effort to make these people accountable that has not been available through the political system.”

Number of comments: 3

10/14/2015 3:45:20 AM - Suplemen Peninggi Badan, suplemenpeninggibadanterbaik@yahoo.com, suplemenpeninggibadanblog.wordpress.com

this is nice information

12/30/2015 10:30:36 AM - aankpudin, aankpudin@yahoo.com

nice post and good blog for me

2/5/2016 2:42:03 PM - Kumpulan PIN BB, kumpulanpinbb@gmail.com, www.indopinbb.com

This article and many other on your blog are very interesting.
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