Here's how a "Business Highlights" item at the Associated Press summarized the situation between Timothy Geithner and London banks whose officials had admitted to rigging the London Interbank Offered Rate ("Libor") on Friday evening: "The Federal Reserve Bank of New York released documents Friday that show it learned five years ago of big banks understating their borrowing costs to manipulate a key interest rate. The documents also show Treasury Secretary Timothy Geithner, who was then president of the New York Fed, urged the Bank of England to make the rate-setting process more transparent."
Today, Charles Gasparino at the New York Post called total BS such pathetic media spin (bolds are mine):
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Geithner yawned at epic fraud
Tim Geithner had evidence of a financial crime of epic proportion — so he wrote a memo.
That’s about the only way you can sum up the then-New York Fed boss’ actions several years ago, when he was confronted with fairly compelling evidence that banks under his direct supervision were manipulating Libor — a key benchmark of global finance.
The Libor scandal has become pretty big news, with Barclays ousting its CEO and agreeing to pay a large fine even as it cooperates with civil and criminal law-enforcement authorities now investigating other big banks.
But it doesn’t end there: There’s also evidence that top regulators, including Geithner, now Treasury secretary, knew about and largely ignored the mess.
On Friday, the New York Fed released documents that supposedly exonerate Geithner. Selective leaks to friendly news outlets ensured kind first-day coverage, with one headline reading “Geithner tried to curb bank’s rate rigging in 2008.”
But that’s a bizarrely generous read of Geithner’s action (or inaction) on learning that Barclays actually admitted to one of his investigators that it had submitted false data for the computation of Libor, and that other banks were doing the same.
As I wrote last week, the New York Fed has long enjoyed a cozy relationship with the banks under its regulatory umbrella — ignoring even the stuff that brought down the financial system in 2008.
... rigging Libor is a pretty big deal. Yet Geithner treated it like a parking violation.
Read the whole thing.
A reasonable question -- one the establishment press would be asking incessantly if a Republican president's Treasury Secretary had conducted himself or herself in this manner in an election year -- is whether Geithner shrugged it all off while keeping it from the public because he knew that the deeper the crisis, regardless of its effect on average citizens, the better the chances that his pal Barack Obama would win the November 2008 presidential election.
Gasparino is correct to call out certain press outlets, including the Associated Press, aka the Administration's Press, for serving as "friendly news outlets" for "selective leaks." Thus it is no surprise that I have seen no visible evidence that any establishment press beat reporter is even thinking about going where columnist Gasparino has gone -- which is about all you need to know to establish whose side the press is on.
Cross-posted at BizzyBlog.com.