New York Fed Defends Move in A.I.G. Bailout

New York

The Federal Reserve Bank of New York defended itself on Tuesday against complaints that it had told the American International Group to cover up critical bailout details in public filings, saying it had suggested deleting a sentence about paying the insurer’s trading partners 100 cents on the dollar only because “it was not in fact precisely accurate.”

The New York Fed said in a statement that it wanted to have “the greatest possible precision in A.I.G.’s related securities filings” and that “the counterparties ultimately received slightly less than 100 percent of par value” to unwind tens of billions of dollars in derivatives. It did not say how much was “slightly less.”

The New York Fed did acknowledge that “the proposed sentence was close enough to work in many contexts” and that “the FRBNY and many others have noted that the counterparties received essentially par value.” It also acknowledged that “the point is rather technical.”

The statement came as the New York Fed said it was releasing more than 250,000 pages of documents to the House Oversight and Government Reform Committee, which is investigating the bailout of A.I.G. and the disclosures made by the insurer. The committee’s Democratic chairman, Representative Edolphus Towns of New York, issued a subpoena last week demanding records from the New York Fed related to the bailout.

The New York Fed’s detailed statement was first examined by Bloomberg News.

Earlier Tuesday, Ben S. Bernanke, the Federal Reserve’s chairman, asked the Government Accountability Office, the investigative arm of Congress, to conduct a “full review” of the A.I.G. bailout.

The House Oversight Committee has scheduled a hearing on the A.I.G. bailout and the insurer’s public disclosures on Jan . 27, and it said Treasury Secretary Timothy F. Geithner would appear to testify. Mr. Geithner was president of the New York Fed at the time of the A.I.G. bailout in late 2008.

The committee also said it was seeking testimony from former Treasury Secretary Henry M. Paulson Jr. and Stephen Friedman, a Goldman Sachs director who was chairman of the New York Fed during the A.I.G. bailout.

The New York Fed’s effort to limit A.I.G.’s disclosure of the payments to its trading partners came to light earlier this month in e-mails obtained by Representative Darrell Issa of California, the ranking Republican on the House Oversight Committee.

Tens of billions of dollars were paid to banks including Goldman Sachs, Morgan Stanley, Barclays, Bank of America, Deutsche Bank and Société Générale in what Mr. Towns and other have derided as a “backdoor bailout.”

Go to Statement from the Federal Reserve Bank of New York »

Go to Article from Bloomberg News »

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anyone know if he is coming to New York i really want to see him in Concert and don't know if he comes to New York.If he is where is he Playing?

Mondays headline story Daley and Bloomberg heap praise on each other

New York City

Posted by Hal Dardick at 8:07 p.m.

New York Mayor Michael Bloomberg had nothing but praise this afternoon at a South Side school for his Chicago counterpart, Richard Daley, as Bloomberg announced a grant to help the Daley administration promote volunteerism.

“Chicago is a role model,” Bloomberg said, singling out Daley’s efforts to reform education. “I’ve always thought if you called central casting and said send me a great mayor, Richie Daley would be the person that they would send.”

Daley, in turn, praised "my good friend Mike Bloomberg" and called his East Coast colleague someone who “brings mayors together.” He praised Bloomberg for championing tougher gun-control laws.

Is there a reciprocity agreement between California and New York for teaching credentials?

I'm studying to become a teacher in New York. After obtaining my teaching credentials here, will I have problems becoming a teacher in California. What must I understand while taking my coursework in New York, eventhough I want to teach in California.

Monday's worrying story School Plan for U.S. Aid Gets No Vote in Albany

New York

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An eleventh-hour push by Mayor Michael R. Bloomberg and Gov. David A. Paterson to improve New York State’s chances to receive up to $700 million in federal education financing faltered on Monday after the State Legislature balked at the plan.

The governor had called the Legislature into session Monday night to consider a proposal that would increase the number of charter schools allowed in the state, which would help the state in the federal competition known as Race to the Top.

But a bill put forth by the governor differs in key respects from one proposed by the legislative leadership. Both would allow more charters, but the legislative proposal would also place significant new restrictions on them, drawing protests from the mayor and charter school advocates.

Both the State Senate and the State Assembly refused to put a bill to a vote Monday. They were due back in session Tuesday morning.

For weeks, Mr. Bloomberg and his schools chancellor, Joel I. Klein, had refused to endorse the state’s application for Race to the Top money, in part to pressure state lawmakers to raise a statewide cap on the number of charter schools. The competition will award $4 billion in federal stimulus money to states that present the most innovative plans for educational reform, including their willingness to start charter schools.

With the Tuesday afternoon deadline for Race to the Top applications just hours away, the city decided to shift tactics. The mayor said the city would sign the state’s Race to the Top application, and made it clear who he believed would bear the blame if the state loses.

“In signing on to the state’s application while others weaken it, we are drawing a clear line between those who support reform and the governor’s efforts to win $700 million, and those who merely pay lip service to these goals in order to avoid blame later,” Mr. Bloomberg said in a statement.

“Sadly,” he said, “the application may well be undermined by legislative shell games.”

But the mayor’s last-minute maneuver hit a brick wall in Albany, where lawmakers remained divided over a plan to secure the federal money.

One bill favored by the leaders of the State Senate and Assembly would raise the number of charter schools allowed in the state to 400 from 200, but add new restrictions on how they are created and run. Most onerous to charter advocates and the mayor, the bill would take the power to approve charters away from the New York City schools chancellor and the board of trustees of the State University of New York, which together granted 28 of 29 charters last year, and consolidate authority in the State Board of Regents, which the Legislature appoints.

The bill addresses a number of complaints by the teachers’ union, some parents and legislators about what they view as the unchecked growth of charter schools in New York City. It would require additional community involvement in the granting of charters and greater accountability from them.

Charters would be subject to audits from the state comptroller, for-profit companies would be prohibited from running the schools and charter schools could be placed inside traditional public schools only if the parents of the students already attending those schools approve. The city regularly overrules such objections in placing charters. Charter schools would also have to show that they are admitting and retaining special-needs students.

Much of the bill’s language mirrors a proposal presented earlier this month by the city’s teachers’ union, the United Federation of Teachers, and it is supported by the union. “It’s a good bill, it moves in the right direction, it’s fair,” said Michael Mulgrew, the union president.

The governor drafted a bill that would raise the number of charter schools permitted in the state to 460, slightly more than a tenth of the number of schools in the state, the percentage the governor believes is necessary to win Race to the Top points. His bill leaves out most of the additional restrictions that the mayor and charter school advocates oppose.

City education officials said they would ask Mr. Paterson to consider vetoing the legislative leaders’ bill if it passed in its current form, as they believed it would hurt, not help, the application.

But the governor said Monday night that he believed vetoing the bill would harm the state’s chances to receive any financing at all, and that a grant application he considered faulty was better than no application at all.

Mr. Paterson did, however, chastise legislators for failing to act on his bill. “I am at this point imploring the Legislature that we must act,” he said. “We have to get the application to Washington by 4:30 tomorrow afternoon.”

There was considerable confusion on Monday night about which plan — if any — would ultimately pass the Legislature. Neither the governor’s plan nor the plan favored by legislative leaders had a clear path to being approved in either chamber. “Right now we’ve got a big pile of nothing,” said Senator Eric T. Schneiderman, a Democrat from Manhattan.