Timothy Geithner

NEW YORK – While the nomination of Treasury Secretary Timothy Geithner generated plenty of heat because of his failure to pay income taxes for five years, almost unnoticed amid the controversy is the fact that he presided over the failure of some of the largest banking institutions in the world – institutions he was charged with overseeing and regulating as head of the New York region of the Federal Reserve Bank.

On Nov. 17, 2003, Geithner became the ninth president and chief executive officer of the Federal Reserve Bank, a position he held until he was nominated by President Obama as treasury secretary.

The Federal Reserve's charter makes it responsible for the strength of the financial institutions operating in each of its 12 regional districts. The Federal Reserve Bank of New York presides over Wall Street-based financial institutions.

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In the current financial crisis, the Federal Reserve has played a major role in responding to the meltdown of banks and investment firms, including some of the nation's largest.

During Geithner's tenure as CEO of the New York Fed, he presided over the following major economic failures:

• March 2008: Investment bank Bear Stearns collapses from losses in subprime mortgage obligations and derivatives transactions; J.P. Morgan Chase buys Bear Stearns in a deal arranged by the Federal Reserve for the dramatically reduced value of $2 a share, with the Federal Reserve guaranteeing J.P. Morgan against $30 billion in Bear Stearns asset losses.
  
  
• September 2008: Wall Street investment bank Lehman Brothers closes doors in bankruptcy after the U.S. Treasury and Federal Reserve refuse to arrange a merger plan, a bailout or a guarantee program to save the Wall Street giant.
  
  
• September 2008: The Bank of America buys Wall Street investment bank Merrill Lynch in a $50 billion deal that saves Merrill Lynch from having to declare bankruptcy.
  
  
• September 2008: The Federal Reserve extends to insurance giant American International Group, or AIG, an $85 billion loan that saves it from going bankrupt from derivatives loses in a massive $441 billion exposure to credit default swaps.
  
  
• November 2008: Citibank received $45 billion through the Troubled Asset Relief Program, or TARP, plus Treasury Department, Federal Reserve and FDIC guarantees on $306 billion in troubled assets held by the bank.
  
  
• January 2009: Morgan Stanley takes over Citibank's Smith Barney investment unit as Citibank unravels the "financial supermarket" conglomerate accumulated when Sandy Weill combined Travelers Insurance, investment bank Smith Barney and Citibank to form Citigroup in the 1990s.

The Obama administration has touted Geithner as a financial wizard uniquely qualified to preside over the U.S. Treasury during this period of economic crisis, despite the obvious failure of the New York Federal Reserve Bank to sustain the solvency of New York financial institutions during his tenure.

Globalists also noted Geithner's credentials. He worked for Kissinger and Associates for three years in Washington, D.C.

Then, from 1998-2001, he served as under secretary of the treasury for international affairs under Clinton administration treasury secretaries Robert Rubin and Lawrence Summers.

He is an active member of the Council of Foreign Relations.

Geithner also has previous ties to Obama.

At the Ford Foundation in the early 1980s, Geithner oversaw micro-finance programs in Indonesia, where he reportedly met in person with Obama's mother. Ann Dunham spent part of her career working in Indonesian micro-finance after she received her Ph.D. in anthropology.

 

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