A House committee has scheduled a hearing to examine the Federal Reserve Bank of New York’s possible role in prohibiting public disclosure of some of the details of the taxpayer bailout of American International Group.

Edolphus Towns

Rep. Edolphus “Ed” Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, announced that a hearing will be held the week of Jan. 18 to examine advice from the New York Fed following the release of e-mails between its lawyers and AIG. The e-mails, according to Towns, indicate that the troubled insurer was advised to withhold key details from the public about the terms of its nearly $180 billion bailout.

Press reports indicate that the e-mails feature New York Fed officials encouraging AIG to withhold references to billions of dollars of counterparty payments made with taxpayer money owed to other firms, including Deutsche Bank, Wachovia, Goldman Sachs and Merrill Lynch.

At issue was whether AIG should reveal to the public that the banks who bought credit-default swaps from the firm would receive 100% of their value, the New York Fed advised the insurer against including that information in filings with the U.S. Securities and Exchange Commission, according to reports.

“More than one year after the first federal bailout of AIG, the American people continue to question where their tax dollars were really sent when the government rescued this company,” Towns said in a statement. “I continue to believe that a comprehensive review of the rise and fall of AIG, and the involvement of counterparties can provide a useful vehicle to understanding how inadequate regulations, cheap money, risky business deals, and in some instances, corruption led to the current economic crisis.”

U.S. Treasury Secretary Timothy Geithner, who served as the New York Fed’s chairman from 2003 to 2008, was invited to testify at the hearing.

White House Press Secretary Robert Gibbs said, during his Jan. 8 White House press briefing, that Geithner “was not involved in any of these e-mails.”

“These decisions did not rise to his level at the Fed,” Gibbs said.

Reuters reported that the New York Fed is backing the White House’s contention.

In a letter to Rep. Darrel Issa (R-Calif.), the congressman who distributed some of the exchanges, New York Fed general counsel Thomas Baxter said Geithner was not involved in the disclosures.

“In my judgment, as the New York Fed’s chief legal officer, disclosure matters of this nature did not warrant the attention of the president,” Baxter wrote in the letter, according to Reuters. “Further, Mr. Geithner played no role in, and had no knowledge of, the disclosure deliberations and communications referenced in those emails.”