Deval Patrick helped sell Citi on Ameriquest, and Geithner helped shield Citi from Accountability

You may remember that Deval Patrick tossed the “falling knife” that almost killed Citigroup.  That knife was the assets of ACC Capital Holding and Ameriquest.  

Shocking new allegations in today’s Financial Times say that Timothy Geithner, the U.S. Secretary of the Treasury Department, purposely and willfully shielded his friends at Citi from the regulatory eye. Specifically mentioned are the purchase by city of bad investments, like Ameriquest.

Tim Geithner, the US Treasury secretary, acted to shield Citigroup’s bondholders and management from accountability at the height of the financial crisis while taxpayers were left on the hook, a former US bank regulator has alleged.

Sheila Bair, who served as chairman of the Federal Deposit Insurance Corp during the crisis and its aftermath, levelled fresh attacks at Mr Geithner, the Obama administration, fellow financial regulators and bankers such as Vikram Pandit, Citi’s chief executive, in a new book that has laid bare policy disagreements of the past few years.

Ms Bair claims that Mr Geithner was relentless in his advocacy for Citi, both in its attempts to buy faltering lenders and when it came to applying restrictions tied to its various rescue packages by the government. “Tim seemed to view his job as protecting Citigroup from me, when he should have been worried about protecting the taxpayers from Citi,” Ms Bair wrote of Mr Geithner, who she nicknamed the “bail-outer in chief” of the 2008 crisis.

One wonders if Elizabeth Warren finds this troubling, or if her relationships with the top Democrats involved, like Deval Patrick, will keep her silent.

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