Secretary Loophole

When historians look at the dramatic shift in the government-business relationship occurring now, they may well place, at the center of it all, the ingenuity of Timothy Geithner, the Treasury secretary and recently the chairman of the New York Federal Reserve Bank.

I wrote the cover story for the current American Spectator, titled "Secretary Loophole":

From his time at the Federal Reserve Bank of New York to his turbulent four months so far at Treasury, Geithner has made a career out of seeking—and usually finding—ways to do what most people thought the rules wouldn’t allow.

....

It could be that Geithner’s value for Obama— in these unprecedented times and given Obama’s unprecedented ambition—is precisely his ability to find his way around the rules.

It's now online here.

Liddy's Goldman Sachs Holdings Gets Some Attention

A week ago, I broke the news in my Examiner column that AIG's CEO Ed Liddy owns more than $3 million in Goldman Sachs stock. Yesterday, Rep. Elijah Cummings (D-Md.) responded to this story with a press release, calling on Liddy to step down.

Since Cummings' press release, Bloomberg, Reuters, the Wall Street Journal, and others have all followed up, citing Cummings and the Examiner. The N.Y. Post and another NYC daily have also followed up on my column and Cummings' release, but they don't cite the original scoop.

Rep. Cummings, Citing my Examiner Piece, Calls on AIG's Liddy to Resign

Rep. Elijah Cummings, D-Md., has renewed his call for AIG CEO Edward Liddy to resign. In a press release today, Cummings specifically refers to my column that revealed that Liddy still owned $3 million in Goldman Sachs stock.

I am extremely concerned by recent media reports that AIG CEO Edward Liddy owns more than $3 million of stock in Goldman Sachs, which topped the list of companies that received billions of dollars in counterparty payments from AIG. Regardless of whether or not Mr. Liddy is acting in the best interest of AIG or of his stock in Goldman, even the appearance of conflict of interest is a reason for alarm.

AIG head’s $3M in Goldman stock raises apparent conflict of interest

My Examiner column today is the first to report a fact that highlights the conflict-of-interest problems raised by the new government-business partnership:

Edward Liddy, CEO of government-run AIG, still owns more than $3 million of stock in Goldman Sachs, which has pocketed $13 billion or more of the $170 billion federal officials have spent bailing out the ailing Wall Street insurance giant.

Liddy is managing a company that receives taxpayer dollars to pay other financial firms, with Goldman Sachs the top recipient. While there is no reason to believe Liddy is influencing AIG actions to unfairly benefit Goldman, the situation represents a potential conflict of interest that would never be allowed in a government agency, but is permitted in the strange public-private chimeras, like AIG, spawned in this age of bailouts.

Read the whole thing here.

Obama Cracks Up

My second piece in the New York Post is up, recounting Obama's worst week to date:

The AIG bonuses, alienating our allies, that Special Olympics crack on "The Tonight Show there's certainly plenty of competition, but this was probably the worst week of President Obama's nascent administration.

The problem wasn't just bad decisions followed by rash reactions and changing stories. The mistakes, oversights, cover-ups, and bad press of this past week all hit Obama in the most sensitive spots, undercutting the pillars on which he had built his rare transpartisan appeal.

Read it here.

AIG mess clips the wings of high-flying Obama team

As part of our package on Obama's fall from grace, here's my piece on how the AIG mess has clipped the wings of our better angels.

The bonuses provide an early glimpse of an administration that is not offering the kind of change people were waiting for. The technocratic competence symbolized by the Ivy League degrees has proved a farce in practice. The honest and transparent government represented by ambitious-sounding executive orders has proved to be more smoke than substance.

Worst of all, this episode has dashed hopes that Obama would, in his words, “govern for all the people, not just the interests of the wealthy and well-connected.”

Read the whole thing here.

AIG feels at home in the government

My September 19, 2008, column for the Washington Examiner addresses the AIG bailout:

To judge by the rhetoric coming from Capitol Hill liberals, you would think the recently bailed-out American International Group (AIG) was some sort of free-market, government-hating, leave-me-alone-to-make-my-profits capitalist cowboy before it came begging this week for a handout from Uncle Sam. The company’s lobbying record and campaign contributions tell a different story.

AIG has built its business in conjunction with big government and, naturally, lobbied for big government programs that make some of its businesses possible. Still Democrats are using the company’s collapse, and the broader context of the financial crisis, as an indictment of the free-market and of Republicans.

Read the whole thing here.