The EIR European Strategic Alert
by Harley Schlanger, LaRouche Pac:
As the LIBOR “Crime of the Century” is unfolding internationally, it will mean the end of the career, and possibly prison time, for Timothy Geithner, currently U.S. Treasury Secretary, and formerly President of the New York Federal Reserve branch. Lyndon LaRouche’s characterization of Geithner as “dead meat,” is not extreme, considering that former New York Governor Eliot Spitzer, in an interview, compared Geithner’s role in covering up LIBOR’s rigging of interest rates to the cover-up of the crimes of former football coach, and convicted serial child molester, Jerry Sandusky, by his employers at Pennsylvania State University!
Geithner’s role emerged during testimony by Barclay’s former CEO, Robert Diamond, before a British Parliamentary inquiry. Diamond revealed that Barclay’s had been in contact with the New York Federal Reserve branch, about the rigging of interest rates, when Geithner was its President. The NY Fed, which oversees Wall Street, has a special regulatory role, as a watchdog agency. Yet, a series of emails released, following Diamond’s testimony, shows that Fed officials – including Geithner – were not only aware that the LIBOR banks were rigging interest rates, and did nothing to stop it, but later rewarded those same banks, with trillions of dollars in bailout funds and credits.
Barclays alone received $868 billion in bailout loans, at no interest!
Geithner personally sent an email to British authorities on June 1, 2008, suggesting they “strengthen governance and establish a credible reporting procedure.” He added that it would be necessary to “eliminate incentive to misreport.” Thus, Geithner knew that the “reporting procedure” was flawed, as it involved flagrant lying about the rates reported by LIBOR. As to eliminating “incentive to misreport,” why were no criminal charges brought against those involved, which would have been a strong, and legitimate, disincentive?
Geithner was rewarded by being appointed Treasury Secretary by Obama, and has continued the cover-up to this day!
The legal wheels are spinning in the U.S., as trillions of dollars have been given to banks which engaged in outright fraud, while their victims have been forced to impose killer austerity. Twelve U.S. Senators, including senior Democrats such as Carl Levin of Michigan and Diane Feinstein of California, sent a letter calling for criminal investigations into the LIBOR crimes.
There is also action on the state and local level, as state and city governments, public pension funds, and others, have been victimized by the rigging of rates. Such entities have been swindled out of billions of dollars, as the investment divisions of the “universal” banks sold “interest rate swaps” and other forms of “risk insurance” to them, to protect against rising interest rates, knowing that the bank divisions of those same banks were rigging the rates – thus forcing their clients to pay up, when their bets went bad. Officials in Baltimore charged that they had to pay when bankers manipulated the interest rate on hundreds of millions borrowed by the city, while Oakland, California has “fired” Goldman Sachs for the fraudulent interest rate “insurance” it sold the city. Seventy-five percent of major U.S. cities have swap contracts linked to LIBOR. In 2010, municipalities paid $4 billion in penalties, to opt out of such deals.
In the meantime, to pay the fees to the swindlers, governments are forced to cut budgets in public safety, health care and education, closing police and fire stations, hospitals and health care centers, to balance budgets – at the cost of human life.
A full investigation into these crimes will incriminate not only Geithner, but President Obama, providing a compelling reason for his removal from office.