Thursday, July 19, 2012

Geithner: 'I Have Been The Most F***ing Transparent Secretary Of The Treasury In This Country's Entire F***ing History'

Neil Barofsky is out with a new book. Mark Gongloff reports on it:
"Neil, I have been the most fucking transparent secretary of the Treasury in this country's entire fucking history!" Geithner erupted, in an episode that had Barofsky wondering if Geithner was going to "throttle" Barofsky's new book, "Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Streetm" the book recounts Barofsky's front-row view of how the Bush and Obama administrations handled the bailouts of banks, auto makers and homeowners after the financial crisis. Few players come off looking great in the book, but Geithner and his Treasury Department are cast in a particularly bad light.

Congress created Barofsky's position of special inspector general to keep tabs on how TARP money would be spent. Though a Democrat who donated to President Obama's 2008 presidential campaign, Barofsky was appointed by President George W. Bush and had a cordial relationship with then-Treasury Secretary Hank Paulson. Barofsky hoped for even better things from the Obama administration.

Instead, Geithner's treatment of Barofsky ranged from disdain to thundering rage.

In the thundering-rage episode, Barofsky met with Geithner in the fall of 2009 to express his concern that the Treasury Department had made TARP unpopular by not being fully forthcoming about how TARP was being used, including not forcing banks disclose how they were spending TARP funds.

"I said that I thought our capacity as a nation to deal with what could be a continuing financial crisis was being undermined by a loss of faith in government," Barofsky writes. "Then I said that the current loss of government credibility could be traced to Treasury's mishandling of TARP."

"Geithner got dramatic," Barofsky writes: "'Neil, you think I don't hear those criticisms? I hear them. And each one, they cut me,' he said, pausing and then making an emphatic cutting motion with one hand as he said 'like a knife.'"

After a Geithner subordinate in the room, Herb Allison, expresses personal offense at Barofsky's suggestion that Geithner has not been fully transparent, Barofsky responds:

"I am not suggesting that the secretary has failed in transparency, I am stating it. Mr. Secretary, you've failed to be sufficiently transparent, and that is one of the reasons why people are so angry. But you can still fix it."

And that's when the ticking time bomb that was Geithner erupted, says Barofsky:

"'No one has ever made the banks disclose the type of shit that I made them disclose after the stress tests. No one! And now you're saying that I haven't been fucking transparent?'"

Barofsky writes that he'd heard about Geithner's propensity for potty talk, but was still taken aback.

Barofsky writes that he responded to the meltdown with some mollifying words, but without backing down: "'Mr. Secretary, you've done some good things, to be sure,' I responded, and after a pause, I said slowly, 'but you could do so much more.'"

At that point in the meeting, Barofsky says, "Geithner looked as if he was going to get out of his chair and throttle me."

Cooler heads prevailed, and the meeting went on, but Geithner never really came fully off the boil, Barofsky writes:

"As we parried back and forth, Geithner repeatedly reached a pitch of anger, regaling me with detailed expletive-filled explanations that established my apparent idiocy. He would then calm himself down and give me a forced, almost demonic smile."

The meeting ended on a relatively cordial note, but that did not change Barofsky's assessment of the meeting: "It was the weirdest meeting of my life."


  1. "I have been the most fucking transparent secretary of the Treasury in this country's entire fucking history!"

    Not possible, or he would have already done the perp walk. It is, however, now just a matter of time...

  2. "He would then calm himself down and give me a forced, almost demonic smile."

    Power has a nasty habit of twisting people up. This particular administration and its hangers-on appear to have to higher than average density of personality disorders amongst its ranks.

  3. Geithner is a fascinating person if for no other reason than he's had the front row seat to looking constantly into the abyss -- in the US AND Japan during the late 1990s. I would feel the same way about Bernanke, but he's too much of an academic and may actually believe the chart gazing. Geithner feels more like a realist in this scenario. He's constantly balancing competing interests of an inherently fraudulent financial system and a parasitic state apparatus.

    This is not the first time Geithner has gone into a obscenity-laced episode:

    Not that I would ever defend the FDIC or SEC, neither of which seem to be able to get out of their own way. But Geithner seems generally annoyed at the whole bureaucratic process of having people who don't know what the fuck they're doing obstructing him. The suggesting that he hasn't been transparent is just asinine. I'm sure Geithner would love to tell you how bad 2008 and 2009 was and the conversations had behind closed doors.