The American International Group has become a symbol for the corruption and greed that permeates Wall Street through their repeated abuse of taxpayer provided funds. The national outpouring of rage that AIG invoked was unparalleled by even Bernard Madoff. Popular discourse has focused on the $70 billion allocated to AIG through the Bush administration’s Troubled Asset Relief Program (TARP). However, the TARP funds provided to AIG pale in comparison to the financing the Federal Reserve Bank of New York extended to AIG while under Timothy Geithner’s leadership.
Geithner injected AIG with capital from the Federal Reserve in both September and November of 2008. As of May 2009, AIG has received a total of $123.8 billion from the Federal Reserve. Geithner and AIG have many mutual friendships in their professional circle. From 1985-1988 Geithner was an employee of the Kissinger Associates, an international consulting firm devoted to providing advice and advocacy to their clients, which includes helping them to develop strategic partnerships and investment opportunities across the globe. The Kissinger Associates has been the target of numerous conspiracy theories, due to their secretive nature. Reportedly a clause in the contract with the Kissinger Associates prevents their clients from revealing their relationship.
According to Henry Kissinger, Geithner was hired to help research a book. During the 1980s, the Kissinger Associates was an extremely small firm with only 25 employees, including Geithner and Henry Kissinger’s bodyguards. AIG’s relationship with the Kissinger Associates dates back to the time period when Geithner was an employee. In 1987, AIG appointed Henry Kissinger Chairman of their International Advisory Board. In 2000, AIG and Kissinger Associates launched a joint venture to provide financial advisory services to corporations. The third partner in the venture was the Blackstone Group, which has grown into one of the largest alternative asset management firms in the world.
Pete Peterson, the co-founder of the Blackstone Group, was responsible for recruiting Geithner for the position of President of the New York Federal Reserve, which he filled from 2003 until his appointment as Treasury Secretary. An offshoot of the Blackstone Group, BlackRock Inc., received numerous no-bid contracts from the New York Federal Reserve in the buy-out of Bear Stearns, and the bailout of AIG devised by Geithner. In 1988, Laurence Fink launched BlackRock Inc. as a money management division of Blackstone. In 1993, BlackRock Inc. separated from the Blackstone Group to operate as an autonomous firm, and currently manages $1.28 trillion in assets.
