Source: Bloomberg

Jan. 16 (Bloomberg) -- Former Treasury Secretary Henry Paulson has been asked to join his successor Timothy Geithner in testifying before a House panel examining bailout payments to American International Group Inc.’s trading partners.

Paulson was invited to a Jan. 27 hearing set by Edolphus Towns, chairman of the House Oversight and Government Reform Committee, about the decision to fully reimburse AIG’s bank counterparties for $62.1 billion in derivatives. Stephen Friedman, the former Federal Reserve Bank of New York chairman who serves on the board of Goldman Sachs Group Inc., was also asked to appear, Towns said in a statement yesterday.

“Chairman Towns is well aware of the fact that President Bush’s Treasury secretary orchestrated this bailout,” Jenny Rosenberg, a spokeswoman for the New York Democrat, said in an e-mail explaining why Paulson was invited.

The request widens the probe into what lawmakers have called a “backdoor bailout” of banks that benefited from the $182.3 billion U.S. rescue of AIG. Geithner, who ran the New York Fed when AIG was saved in 2008, agreed to testify before the committee after Darrell Issa, a California Republican, released e-mails last week showing that the New York Fed asked AIG to withhold data about bank payments.

Read more: http://www.bloomberg.com/apps/news?pid=206...

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Paulson was known at Goldman Sachs as 'Mr. Risk'. He has said he had nothing to do with this decision.