Wednesday, March 24, 2010

Mary Jo & the Politically Motivated Hearing

Congresswoman Mary Jo Kilroy may have just bumbled her way into exposing further evidence of the incompetence of Obama Administration Treasury Secretary Timothy Geithner. House Financial Services Committee Chairman Barney Frank (D-Mass.) has granted Congresswoman Kilroy’s request for a hearing into the already-investigated collapse of the former Wall Street banking company Lehman Brothers. Ms. Kilroy’s call for a hearing appears to be politically motivated by a desire to create a forum for attacking Ohio gubernatorial candidate and former Congressman John Kasich, a former employee of Lehman Brothers. Recent polls show Mr. Kasich on course to defeat Kilroy political ally Governor Ted Strickland in the November election.


Congresswoman Kilroy’s ill-conceived plan to discredit Mr. Kasich may backfire, however, as teams overseen by then-Federal Reserve Bank of New York President Timothy Geithner were in the office looking over the shoulders of Lehman Brothers executives as the questionable accounting practices responsible for the institution’s collapse took place. Geithner’s teams were provided desks, phones, computers, and total access to all of Lehman Brother’s books and records. The court-appointed bankruptcy examiner’s report does not indicate that Lehman Brothers kept two sets of books or attempted to hide its accounting practices from regulators. It would appear the questionable accounting was taking place in full view of Timothy Geithner’s team.


In fact, Timothy Geithner’s team appears to have gone to great lengths to give Lehman Brothers’s questionable accounting practices a passing grade. Geithner’s team may have even been complicit in disguising the instability of the institution. On page 1,488 of his report (page 445 of this PDF), the bankruptcy examiner describes how Tim Geithner’s team reduced standards to ensure Lehman Brothers would appear to be in good working order.


If Congresswoman Kilroy is serious about investigating the circumstances that led up to the collapse of Lehman Brothers, she must start with questioning Treasury Secretary Geithner’s ineffective oversight of the organization. If Geithner lacks the capacity to recognize “materially misleading” (the bankruptcy examiner’s words) accounting practices at a single Wall Street banking institution, how can he possibly have the competence to oversee the entire Treasury Department?


However, Ms. Kilroy doubtfully has the courage to ask the tough questions and demand accountability from Secretary Geithner, an Obama appointee. Instead she will undoubtedly use the hearing as an attempt to implicate Mr. Kasich in a scandal by his association as a Columbus-based employee of the collapsed institution.


NEVERMIND that the collapse of Lehman Brothers has already been investigated.


NEVERMIND that John Kasich was over 500 miles away in Columbus, Ohio while Timothy Geithner’s teams were in the room with Lehman Brothers executives as the questionable accounting occurred.


NEVERMIND the facts!


THIS IS POLITICS! By Kilroy’s reckoning, reality only muddies the water. She’s got to deliver for the Ohio Democratic Party so they will deliver for her.


If the Congresswoman were interested in representing her constituents she would devote her time towards fixing the economy and creating jobs, not breaking her knuckles beating a dead horse by reinvestigating a financial institution that collapsed years ago and has already been fully investigated.