US officials sought ‘national security’ clause to keep bailout details secret

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US officials in charge of regulating securities exchanges sought to apply a ‘national security’ clause to information relating to the government’s bailout of giant insurance company American International Group (AIG). Emails obtained by Reuters show that, in November of 2008, the New York Federal Reserve (NYFR), which administered the bailout, collaborated with AIG in requesting that US Securities and Exchange Commission (SEC) officials apply “special security procedures” to shield bailout-related information from public scrutiny. Instead of dismissing the –possibly illegal– request, SEC officials advised NYFR and AIG to publicly file heavily redacted versions of the documents in question, and request “confidential treatment” for the redacted portions, citing ‘national security’ clauses. This is precisely what NYFR and AIG did, in an effort to shield the data from Freedom of Information Act (FOIA) requests by US media, as the emails obtained by Reuters show. The emails are now in the possession of the US House Committee on Oversight and Government Reform, which plans to hold a hearing later this week into the intriguing collusion of SEC and NYFR in AIG’s bailout. Commenting on the leaked emails, the office of Committee member Rep. Darrell Issa (R-CA), said they indicate that the parties involved were “orchestrating what can only be characterized as an extreme effort to ensure that details of the counterparty deal stayed secret […] indefinitely, if they could”.

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Expert news and commentary on intelligence, espionage, spies and spying, by Dr. Joseph Fitsanakis and Ian Allen.

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