Today under intense and at times brutal questioning by the House Interrogation Committee, Timothy Geithner, Secretary of the Treasury, broke down sobbing and confessed to the largest theft of taxpayer money in history. Geithner, who was president of the New York Federal Reserve Bank in 2008, admitted for the first time publicly that at the time of the forced sale of Bear Stearns to JPMorgan Chase, that the CEO of JPMorgan, Jamie Dimon, WAS ACTUALLY HIS BOSS AT THE NY FED, and that the two of them colluded behind the scenes to, as he put it, “crush Bear's balls.”
When Congressman McWhistle asked Geithner how a private banker like Jamie Dimon could possibly be the boss of the president of the New York Fed, Geithner answered with stinging invective in his voice:
“That’s the problem, congressman: ignorance. Most people, even I would dare say, most congressmen, have no idea that the New York Federal Reserve Bank like all the other federal reserve banks are PRIVATE BANKS. Nonetheless, they are private banks with private owners. And the board members rule.”
CONGRESSMAN McWHISTLE: You say the New York Federal Reserve is a private bank?
SECRETARY GEITHNER: Yes, sir.
CONGRESSMAN McWHISTLE: And that it has private owners?
SECRETARY GEITHNER: Yes, sir.
REP. McWHISTLE: Who owns the New York Fed?
SECRETARY GEITHNER: You want the names?
REP. McWHISTLE: Yes, sir, the names.
SECRETARY GEITHNER: The New York Fed is owned by Citigroup, JPMorgan, Deutsche Bank AG, Bank of New York Co., Charles Schwab Corp.'s U.S. Trust Co., M&T Bank Corp. and U.S. divisions of Banco Popular Espanol SA, HSBC Plc, Mizuho Financial Group Inc., and Royal Bank of Scotland Group Plc.
REP. McWHISTLE: Sir, it sounds like you are saying among other things that the New York Federal Reserve Bank is owned in part by foreign banks.
SEC. GEITHNER: Yes, sir, their New York branches.
When Geithner was pressed about why Bear Stearns was forced into a sale, the Treasury Secretary again broke down, bitterly complaining that Bear was not a team player. When he composed himself he explained that in 1998 when the New York Fed was trying to bail out Long Term Capital Management, Bear Stearns was the only bank in the inner circle that wouldn’t put up $100-300 million into the kitty to save LTCM. Bear declined to participate. For that, Geithner said, Bear had to pay.
REP. McWHISTLE: But why JPMorgan?
SECRETARY GEITHNER: Again, congressman, the ignorance: the simple fact is that Jamie Dimon, who is the CEO of JPMorgan, was my BOSS at the Fed.
REP. McWHISTLE: Jamie Dimon was your boss at the New York Fed?
SECRETARY GEITHNER: Yes, sir.
REP. McWHISTLE: How is that possible?
SEC. GEITHNER: Sir, during my tenure at the New York Fed Jamie Dimon was one of the three Class A board directors picked by the owner banks. These guys run the bank. They pick the president. Jamie Dimon was my boss.
REP. McWHISTLE: So you conspired with Jamie Dimon to “kill” Bear Stearns?
SEC. GEITHNER: Yes, sir, if you want to put it that way.
REP. McWHISTLE: And so you forced Bear to sell at $2 a share to JPMorgan?
SEC. GEITHNER: Yes, sir.
REP. McWHISTLE: There’s one thing I don’t get, sir.
SEC. GEITHNER: What’s that?
REP. McWHISTLE: It’s the $30 billion in taxpayer money. We all know you guaranteed the Bear sale with $30 billion in taxpayer money. If the New York Fed is a private bank, how the hell can you put your hand in the taxpayer’s pocket to the tune of $30 billion?
SEC. GEITHNER: All I can say, sir, is that we use the OTT Window.
REP. McWHISTLE: What is the OTT Window?
SEC. GEITHNER: OTT stands for Over the Transom. We have very smart guys who understand how this works. I haven’t figured it out yet.
After the hearing, while Geithner was being led away in handcuffs, he turned and muttered to a dark-haired woman, “Don’t forget to feed the cat.”