MSNBC "The Ed Show" - Transcript

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SCHULTZ: Welcome back to THE ED SHOW.

Members of Congress want answers from Treasury Secretary Tim Geithner. He was the head of the New York Federal Reserve when the bank urged insurance giant AIG to hide the fact that they were overpaying big Wall Street banks with taxpayer money.

Today, the House Oversight Committee issued a subpoena--the New York Fed documents that they think will shed more light on exactly what happened. The committee is also calling for Secretary Geithner to testify.

Joining me now is the ranking member of the House Oversight and Government Reform Committee dealing with this, Republican Congressman Darrell Issa of California.

Congressman Issa, how important is it going to be to get Mr. Geithner up there to raise his right hand, in your opinion?

REP. DARRELL ISSA ®, CALIFORNIA: Well, it"s extremely important. We already know that Secretary Geithner was at the center of deciding to pay 100 cents on the dollar when the going rate was 40 cents on the dollar.

Our bigger challenge now though is, why was there a cover-up, why did it need to be a cover-up, and why is it so important for the Fed to tell us that Geithner, who was supposed to be at the center of everything, suddenly this didn"t rise to his decision level? The decision to cover up, perhaps in violation of SEC regulations, is something that rises to the highest level.

SCHULTZ: Congressman, I haven"t heard that word used anywhere else, "cover-up." That"s a strong word at this point.

ISSA: Well, there is no question, the e-mails indicate that they were being told not to disclose. Now, not to disclose something which is unseemly and unsatisfactory to the taxpayers, and that if it had been known would have led to a whole different series of questions during Tim Geithner"s confirmation, to me is a cover-up.

SCHULTZ: OK.

This is Mr. Gibbs at a press briefing on Friday in an exchange that he had with a reporter. Here"s their response.

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ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Secretary Geithner was not involved in any of these e-mails. These decisions did not raise to his level at the Fed. These are e-mails and decisions made by officials at an independent regulatory agency.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: How do you know that he wasn"t involved? He was the leader of the New York Fed.

GIBBS: Right, but he wasn"t on the e-mails that have been talked about and wasn"t party to the decision that was being made.

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SCHULTZ: One of two things, Congressman. Either Tim Geithner runs a loose ship or there"s something funny going on here.

What do you think?

ISSA: Well, you"re absolutely right that those really are the only two choices. And certainly, Gibbs is carefully parsing his words to say he wasn"t on the e-mails. And Thomas Baxter, an attorney over there, said, well, it didn"t rise to his level, and he"s parroting that.

SCHULTZ: But he said in that sound bite, "was not involved." That"s what he said, "was not involved," and it was handled by officials at an independent regulatory agency.

You believe that?

ISSA: Well, what I believe is that the Fed doesn"t want any scrutiny before, during or after this. And it"s exactly what we have to make sure, is that the Fed is going to commit and spend permanently large amounts of your dollars. We have to make sure that they comply not only with their disclosure requirements, but they not encourage another company to fail to disclose.

SCHULTZ: Congressman, good to have you with us tonight. Thanks so much.

ISSA: Thank you. We"ll stay on it.

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