Treasury Secretary Timothy Geithner came under a torrent of criticism Wednesday at a congressional hearing on the taxpayer bailout of the insurance giant AIG. The hearing was called following the release of emails showing the New York Federal Reserve attempted to keep secret many of the details of the AIG bailout. The Fed’s rescue of AIG remains controversial, in part because it secretly funneled nearly $70 billion to sixteen big US and European banks in what many described as a backdoor bailout. Geithner headed the New York Fed before being tapped to head the Treasury Department. Democratic Congress member Stephen Lynch of Massachusetts criticized Geithner for refusing to use the government’s enormous leverage to wring concessions from AIG.

Rep. Stephen Lynch: “You had every opportunity — every opportunity — to weigh in on behalf of the American people and make these people take a new deal, make them take a haircut. You scalped the folks on Bear Stearns — two cents on a dollar they got! Two cents on a dollar. The folks at Goldman Sachs got 100 cents on a dollar. And that is just unacceptable.”

Democratic Congress member Dan Burton also criticized Geithner.

Rep. Dan Burton: “We have this bailout of AIG, and you don’t know anything about it. Mr. Geithner had nothing to do with it. It just really boggles the mind that some of the biggest people involved in this whole thing, from beginning to end, had nothing to do with it. They didn’t know. It makes you want to think that some clerk someplace was making these decisions. I don’t think anybody is going to buy that.”

Geithner, meanwhile, defended the AIG bailout, claiming it was necessary to stave off widespread economic collapse.

Treasury Secretary Timothy Geithner: “It is not true that the actions we took in AIG were for the benefit of anybody but the millions of Americans who, at that point, were suffering from the worst financial crisis since the Great Depression. The only way to help reduce that damage, protect that damage, was to fix the system and prevent the catastrophic failure that would have made that crisis worse.”