Judicial Watch Files Lawsuit against Federal Reserve to Obtain AIG and Lehman Brothers Bailout Documents

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it filed a Freedom of Information Act (FOIA) lawsuit on May 11 against the Board of Governors of the Federal Reserve System for documents related to the bailout of American International Group (AIG) and the bankruptcy of Lehman Brothers. The lawsuit was filed on behalf of former Federal Reserve employee Vern McKinley. The lawsuit is part of Judicial Watch’s comprehensive investigation to determine under what legal authorities and lawful rationales the federal government initiated the Wall Street bailouts.

With his March 21, 2010, FOIA request targeting information related to the AIG bailout, McKinley requested: “…any and all communications and records concerning or relating to the Board [of Governors’] decision that detail that ‘the disorderly failure of AIG was likely to have a systemic effect on financial markets that were already experiencing a significant level of fragility,’ as described in the [Board] meeting minutes.”

With his March 28, 2010, FOIA request targeting information related to Lehman Brothers, McKinley requested: “…any and all communications and records regarding analysis undertaken regarding Lehman Brothers and the assessment in September 2008 or earlier of what ‘contagion’ might have flowed from Lehman Brother’s filing of bankruptcy, as the word contagion was used in the case of the Board of Governors’ deliberations over Bear Stearns…or ‘systemic effect of financial markets’ that may have flowed from a Lehman Bankruptcy as the phrase was used in the Board of Governors’ deliberations over American International Group…”

The Board of Governors acknowledged receipt of both FOIA requests but failed to respond within the statutory allotted time period, prompting McKinley’s lawsuit.

“We are now trillions of taxpayer dollars into these financial bailouts and a fundamental question remains unanswered: Under what authority did the federal government take such a radically intrusive approach to the financial crisis? How were the bailout winners and losers chosen? The Federal Reserve and the Obama administration owe the American people an explanation,” said Judicial Watch President Tom Fitton.