The latest AIG fiasco may well be the straw that breaks Geithner's "public service" back. The question of Tim's involvement in the purposeful cover up has now attained epic proportions as even the White House claims the Treasury Secretary and former NY Fed governor had recused himself and was not involved in the discussions of the biggest bailout in US history. By doing so, the White House has transferred an ever greater amount of political risk to itself by continuing to back Geithner at increasing costs to its popularity. Whether or not Geithner was intimately involved procedurally seems irrelevant: he certainly was aware of the broad strokes and was thus complicit by implication. Nonetheless, one of the allegations that is circulating the blogosphere is that the handwriting on the "smoking gun" cover up memo belongs to Timmy. While we do not have a certified graphologist in our ranks, this assumption appears to be patently false.

Below is a sample of the handwriting on the memorandum:

Yet a rare glimpse of Geithner, courtesy of Mark Wilson of Getty Images, caught in the act of writing, and for once not refurbishing the truth, indicates a distinctly different handwriting style: one entirely devoid of cursive.

It is obvious that Tim Geithner did not write the memo. But, once again, whether or not he did is irrelevant: it was Tim Geithner's direct or indirect instructions (and we challenge the Treasury Secretary to claim otherwise under oath, with any potential perjury proof subsequently ending not just his career with a criminal bang, but bringing an accelerated end to all the White House apparatchiks who have stood behind the then-NY Fed president) that determined the sequence of events.

Furthermore, we are confident that Geithner, AIG, the NY Fed and the administration will take a book straight out of the Bank Of America-SEC defense, and will in turn blame it all on the lawyers, who in this case are quite a few partners from Davis Polk & Wardwell. DPW is by far the premier US bailout law firm specialist, and is itself very proud of disclosing this, by listing the following assignments in which it acted as legal counsel:

Lead counsel to the Federal Reserve Bank of New York and the U.S. Department of the Treasury on a series of unprecedented financing and capital management transactions for AIG

and the on a series of unprecedented financing and capital management transactions for AIG Lead counsel to Citi on all of its major financial crisis-related matters

on all of its major financial crisis-related matters Lead counsel to the Federal Reserve Bank of New York on the U.S. Treasury’s $250 billion bank capital purchase program and the Creation of the Term Asset-Backed Securities Loan Facility (TALF), through which the New York Fed will extend up to $1 trillion in non-recourse loans to certain holders of newly issued AAA-rated asset-backed securities collateralized by mortgage-backed securities, student loans, consumer loans and small-business loans, among others

on the U.S. Treasury’s $250 billion bank capital purchase program and the Creation of the Term Asset-Backed Securities Loan Facility (TALF), through which the New York Fed will extend up to $1 trillion in non-recourse loans to certain holders of newly issued AAA-rated asset-backed securities collateralized by mortgage-backed securities, student loans, consumer loans and small-business loans, among others Lead counsel to Ford on its restructuring plans

on its restructuring plans Lead counsel to the Federal Home Loan Mortgage Corporation (Freddie Mac) on the U.S. government’s conservatorship and financial assistance package, as well as its subsequent Department of Justice and SEC investigations.

(Freddie Mac) on the U.S. government’s conservatorship and financial assistance package, as well as its subsequent Department of Justice and SEC investigations. Counsel to Her Majesty’s Government (HMG) on U.S. bank regulatory and other issues relating to HMG’s plan to provide financial support to the U.K. banking system.

(HMG) on U.S. bank regulatory and other issues relating to HMG’s plan to provide financial support to the U.K. banking system. Lead counsel to Citi as the organizer of a multi-bank financing on a potential pre-bankruptcy acquisition of Lehman by Barclays. The firm is also advising several major financial institutions on credit exposure issues relating to Lehman

as the organizer of a multi-bank financing on a potential pre-bankruptcy acquisition of Lehman by Barclays. The firm is also advising several major financial institutions on credit exposure issues relating to Lehman Lead counsel to Lloyds TSB on U.S. bank regulatory matters on its acquisition of HBOS. We are also lead U.S. counsel to Lloyds on the investment by HMG.

on U.S. bank regulatory matters on its acquisition of HBOS. We are also lead U.S. counsel to Lloyds on the investment by HMG. Counsel to PIMCO , a leading global investment management firm, in connection with assignments under TARP (Troubled Assets Relief Program).

, a leading global investment management firm, in connection with assignments under TARP (Troubled Assets Relief Program). Lead counsel to Banco Santander on its $1.9 billion acquisition of Sovereign Bancorp.

on its $1.9 billion acquisition of Sovereign Bancorp. Providing legal and technical support to the Securities Industry and Financial Markets Association (SIFMA), the leading U.S. financial industry association, on financial regulatory issues, including the $700 billion TARP and other U.S. government rescue programs and financial regulatory restructuring, including the creation of a systemic risk regulator.

DPW is in fact so proud of its involvment in the AIG situation it has the following tombstone dedicated to the taxpayer funded bailout:

Davis Polk & Wardwell is advising the Federal Reserve Bank of New York and the U.S. Treasury Department in connection with the restructuring of the government's assistance to American International Group, Inc. (AIG). As part of this restructuring, the U.S. Treasury will exchange its existing $40 billion cumulative perpetual preferred shares for new preferred shares with revised terms that more closely resemble common equity and the Treasury Department will create a new equity capital facility, allowing AIG to draw down up to $30 billion as needed over time in exchange for non-cumulative preferred stock issued to the U.S. Treasury. The actions being taken by the Federal Reserve Bank of New York as part of the restructuring relate to the existing $60 billion revolving credit facility for AIG and include reducing the outstanding balance in exchange for preferred interests in two special-purpose vehicles created to hold all of the outstanding common stock of American Life Insurance Company (ALICO) and American International Assurance Company Ltd. (AIA), two life insurance holding company subsidiaries of AIG, and securitization notes of up to $8.5 billion representing embedded value of certain of AIG's U.S. life insurance businesses. After these actions, the total amount available under the revolving credit facility will be reduced from $60 billion to no less than $25 billion. In addition, the interest rate on the revolving credit facility will be modified by removing the existing floor on the LIBOR rate. As required by the revolving credit facility, AIG has agreed to issue on March 4, 2009, shares of convertible preferred stock representing an approximately 77.9% equity interest in AIG to an independent trust for the sole benefit of the U.S. Treasury.



AIG, a world leader in insurance and financial services, is a leading international insurance organization, with operations in more than 130 countries and jurisdictions.



The Davis Polk team includes partners Ethan T. James, Robert L. Heckart, Bjorn Bjerke, John M. Brandow, Kathleen L. Ferrell, John K. Knight, John D. Amorosi, Marshall S. Huebner, Jeffrey N. Schwartz and Beverly Fanger Chase, counsel John T. Wright and associates Diego A. Rotsztain, Michel Beshara, Peter T. Bazos, Rafal A. Nowak, Paul Anderson, Aly El Hamamsy and Eli James Vonnegut. All members of the Davis Polk team are based in the New York office.

Zero Hedge is willing to wager that the handwriting on the memorandum will belong to one of the key named partners: Messrs James or Heckart. In fact, we would recommend to the very much suddenly concerned Congressmen Towns and Frank to invite not just Secretary Geithner in related hearings, but to open up the invitation to the two main partners from Davis Polk. We have already seen Mr. Geithner's regard for the unadulterated truth. Perhaps the game of prisoner's dilemma should be made a little more explicit if nationally televised in Congress. With enough actors invited to the same venue, the likelihood that someone will spill the beans increases exponentially. While we are on the topic of DPW, it would be truly swell to see the conflict of interest checklist that allowed the firm to blatantly disregard the public interest when over $100 billion of taxpayer capital was at stake. Just how did DPW's internal compliance frame this issue and permit the firm to make such broad sweeping decisions on behalf of its client: The Federal Reserve, and thus, America's taxpayers?

And, while we are discussing conflicts of interest, it appears that everyone has forgotten that Chairman of the NY Fed at that time, as well as long thereafter, and a person who certainly did not recuse himself from any AIG-related deliberations was none other than Goldman Sachs board member Stephen Friedman, and who resigned in disgrace after it became apparent that in December 2008 he had acquired $3 million in Goldman stock... Days before the abovementioned "smoking gun" was sufficiently redacted. Perhaps Friedman knew nothing about this development too? Can we get the White House's take on this as well Mr. Gibbs.

We kindly enourage our reputable Congressmen to send an invitation to the Goldman boardmember. At worst, ad rates for a 30 second spot will be high to quite high for non-prime time TV, and NBC, Fox, ABC and C-SPAN will certainly provide some monetary kickbacks to the Congressmen who arrange for this Goldman-related spectacle. And after all, that is what Reps. Frank, Towns et al live for more than anything.