Friday, March 2, 2012

Lehman Bros. Case: Geithner Ignores Subpoena to Testify

Lehman Bros. Case: Geithner Ignores Subpoena to Testify
Lehman Bros. Case: Geithner Ignores Subpoena to Testify | Print |
Written by Bob Adelmann
Monday, 20 February 2012 17:30

Timothy GeithnerThe creditors’ committee representing what’s left of Lehman Brothers asked bankruptcy Judge James Peck last week to force Timothy Geithner (left) — currently Obama’s Treasury Secretary but President of the New York Fed at the time of the Lehman Brothers’ bankruptcy — to answer some questions. The original subpoena issued by the committee to Geithner to appear last August was ignored and so the committee appealed to Judge Peck.

The committee claims that Geithner played a pivotal role in Lehman’s collapse and may have “unique” knowledge about a last-minute transfer of some $8 billion out of Lehman to JPMorgan just before that collapse. Lehman is suing JPMorgan in an attempt to get that money back and Geithner’s testimony is crucial. Time is running out: The discovery period for the committee ends on March 16.

The committee claims that JPMorgan did a “last-second collateral grab” in order to save itself while inflicting fatal damage on Lehman at the same time. And Geithner was in on it. The week before the Lehman collapse Geithner made 35 phone calls to Lehman’s CEO Richard Fuld and another 10 calls to JPMorgan’s CEO Jamie Dimon, and at least some of those calls, said the committee, centered on those collateral demands. Therefore, the committee insists that Geithner should be required to reveal what those calls involved.

Geithner has remained silent; however, a spokesman for the Treasury Department, Anthony Coley, said he couldn’t understand what all the fuss is about: “Treasury and the Fed have provided thousands of pages of documents and arranged for depositions of numerous other witnesses.” [Emphasis added.] In light of all that disclosure, Coley said, “it is unclear why the plaintiffs [Lehman’s committee] continue to insist on unnecessary depositions.”

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