Geithner Hosts U.S. Bailout Reunion With Predecessor Paulson
U.S. Treasury Secretary Timothy F. Geithner, who’s been prodding Europeans to get on top of their banking crisis, hosted a dinner for key players in Wall Street’s 2008 bailout, including his predecessor Henry Paulson and Federal Reserve Chairman Ben S. Bernanke.
Former Fed Vice Chairman Donald Kohn and Neel Kashkari, the first administrator of the $700 billion Troubled Asset Relief Program, also were among the June 4 reunion’s attendees. A Treasury official, asking not to be identified, confirmed the event and said Geithner has long wanted to acknowledge the former officials’ public service.
The meal, described as the government’s standard chicken or salmon and vegetables, was served in a conference room at the Treasury, said two attendees who billed the event as social and not focused on policy. Geithner and Paulson made brief remarks to the group of about 20, the attendees said.
Paulson aides who helped craft the bailout programs also were at the dinner, including David Nason, who is now at GE Capital Corp.; David McCormick, now with hedge-fund manager Bridgewater Associates LP; James Lambright, who works in renewable energy in California; and Kevin Fromer, now at HSBC Holdings Plc. Kashkari is now head of global equities at Pacific Investment Management Co.
Geithner, who took over as Treasury chief in January 2009, was president of the New York Fed when TARP was enacted under the Bush administration, working closely with Paulson and Bernanke. The three, along with Kashkari and Paulson’s spokeswoman, Michele Davis, who also attended the reunion, were lionized in the book and HBO movie “Too Big to Fail.”
Timothy Massad, the current overseer of the TARP program, was at the dinner along with former Geithner Treasury aides Lee Sachs and Matthew Kabaker, both of whom played roles in the bailout for the Obama administration, according to the attendees.
Because the event was private, guests declined to discuss it publicly.
“I’m not going to talk about it,” said Kohn, reached by phone at the Brookings Institution, where he is now a senior fellow. Other attendees either couldn’t be reached or like Kohn, said they couldn’t comment.
The Treasury under Paulson drew on TARP money to inject capital into banks, taking an equity stake in return. The government has also used the funds to rescue insurer American International Group Inc. (AIG), automakers General Motors Co. (GM) and Chrysler Group LLC and to support programs for helping consumers with mortgages.
The Treasury estimates taxpayers will make a $20 billion profit from the bank portion of TARP. Most of that gain comes from funds repaid by firms including Citigroup Inc. (C), Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) All together, TARP is projected to lose about $60 billion, Treasury officials said in a press briefing in April.