Issa: “Secretary Geithner either didn’t know about the bonuses, and was grossly negligent, or he did know and failed to bring this to the President’s attention.”

WASHINGTON. D.C. – House Committee on Oversight and Government Reform Ranking Member Darrell Issa (R-CA) released the following statement today calling on Treasury Secretary Timothy Geithner to resign:

“As one of the chief architects of the AIG bailout, Secretary Geithner was in a position to do what any lender of the last resort would do – negotiate concessions from AIG.  Secretary Geithner either didn’t know about the bonuses, and was grossly negligent, or he did know and failed to bring this to the President’s attention.  Either way, the end result has been a significant waste of taxpayer dollars and he should take immediate responsibility and resign.”

From Politico: “AIG disclosed its retention-bonus program more than a year ago, including bonuses directed to those handling the exotic derivatives that got the company and the country into this mess.  The bonuses were essentially a nonissue when AIG got its initial bailout money, almost $150 billion under President Bush in the two months surrounding the presidential election. Joe Biden, then the vice presidential nominee, came out strongly against the bailout.  Obama did not.  Timothy Geithner, then at the New York branch of the Federal Reserve, was a huge proponent and architect of the AIG bailout. So if Obama had strong private opposition to the idea it did not affect his pick for the person who would oversee all bailouts.

From Washington Post: “Attorneys working for the Fed had been examining the matter for months and determined that the retention payments couldn’t be touched because AIG would face costly lawsuits and be subject to penalties from states and foreign governments. Administration officials said over the weekend that they agreed with that assessment.   AIG disclosed its retention-payment program more than a year ago, and the amount of the bonuses — more than $400 million for Financial Products alone — had been widely reported. But as the payments were coming due in recent days, the White House began to express its indignation.”