BY Erin Geiger Smith
Tomorrow is the big day: Tim Geithner and New York Fed general counsel Thomas Baxter are testifying to a house committee about the AIG bailout.
We're guessing AIG's outside counsel, Davis Polk, will be tuning in. As the hearing draws near, more and more emails are being discussed relating to the NY Fed's desire to keep certain aspects of the AIG bailout quiet. And that strategy, or at least the analysis of it, ran directly through Davis Polk.
Forbes: Federal Reserve Bank of New York officials scrambled to do damage control in the days after their $180 billion rescue ofAmerican International Group in September 2008, including an effort to control information by asking AIG to run significant outside communications through the Fed's outside counsel.
The damage control effort is revealed in e-mail between an in-house New York Fed lawyer, its outside counsel, a partner in charge of the restructuring practice at Davis Polk Wardwell, and other New York Fed and Treasury officials.
Insinuations are flying that the NY Fed under-represented the influence it was exerting over what should and should not be disclosed, though no one has suggested that Davis Polk did anything wrong. So far this seems to be a case of what should have been disclosed, rather than questions of actual illegality.
That does not mean, of course, that emails discussing secretive document deliveries to the SEC so nothing will "get in the wrong hands" (that one authored by former Davis Polk lawyer, and new Mayer Brown partner Diego Rotsztain) are fun to see in print.
Law firms do not like seeing their names in lights, or at least not in on the front page of papers accusing them of helping to hide information from the tax-paying public. But law firms in the news have been a by product of the financial crisis -- over and over we read about law firms getting caught representing their clients.
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