Newt Gingrich Furious About Government's Financial Fix

This is a rush transcript from "Your World With Neil Cavuto," March 20, 2009. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: What did he know and when did he know it? Treasury Secretary Tim Geithner continues to be under the line of fire.

FOX Business Network has been exploring this issue in great detail, that the treasury secretary might have known about these bonuses at AIG a lot earlier than late last week, which seems to be the prevailing timeline given from the White House.

Now, if that is the case and it is distinctly possible that the Treasury Secretary knew much earlier than he said, he could be on borrowed time in his job. We're going to raise this issue with former House Speaker Newt Gingrich who joins me right now on the phone.

Newt, how big an issue is this right now?

NEWT GINGRICH, FORMER HOUSE SPEAKER: Well, I think it's a very big issue. Congressman LaTourette has introduced a resolution of inquiry, which has to be dealt with by the committee that it's in, chaired by Barney Frank.

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The country deserves to know across a whole range of things, not just the bonus problem, but what we learned over the last few days, that Goldman Sachs got $11 billion with not a penny negotiated. They got 100 percent. A French bank, I think, got $15 billion. Deutsche Bank got billions of dollars.

Let's start with the fact that Geithner called the first meeting on Bear Stearns. He called the first meeting on AIG as the head of the New York Federal Reserve. The Treasury apparently has known about the bonuses at least since November.

Senator Dodd is claiming that he's not really responsible, because he's taking so much heat, he's now blaming somebody in the executive branch for having asked him to put in this bonus provision.

CAVUTO: Well, they're all — believe me, they're all hanging Geithner, or at least the Treasury out to dry on this. So that's usually sort of a preview of coming attractions. Where is this going?

GINGRICH: Oh, well, I don't see how he can survive, just given the fact that he has to either make the case that he is incompetent and didn't know about it, or that he's dishonest and knew about it but didn't tell anybody.

Now I don't think those two defenses make you feel very good about the secretary of the Treasury. I mean, we're in a serious economic and financial crisis, and we're discovering every couple of days something brand new.

CAVUTO: But, you know, Newt, you hit on something profound that I think goes beyond the bonuses and people miss it, but I knew, of course, you would not. And that is, leaving the $165 million in bonuses aside, that's a big deal, but the bigger deal is the fact that AIG might have been used as a clearing house to essentially bail out these other institutions that similarly needed taxpayer dough, but you could do it under the guise of giving it to AIG.

So that Web of deceit potentially is a far, far bigger issue, and that — that opens up a can of worms.

GINGRICH: Yes, look, it's interesting, though, the Congress is really quick to demagogue and, I think, violate the Constitution and start passing acts that are aimed at specific people, and they're aimed at taking back money that they are changing the rules, by the way, which are rules that these congressmen voted for.

I mean, there's something truly despicable about what the Congress is doing right now. And it's all demagoguery and it's all designed to — because, you know, the voters are angry, and they figured it better to be in the lynch mob than to be lynched.

But I think the fact is that this Congress made it possible for places like Goldman Sachs to, in effect, get TARP money without having to follow any TARP rules. So they can sit over there. They can pay themselves gigantic bonuses.

None of it is being investigated. You don't see Barney Frank calling in the various groups who received this money, and it has been a very clever con. And the people who have been conned were the American taxpayers.

And I frankly — when I began to see that there was no negotiating, they didn't give back 5 percent, they didn't give back 20 percent, they didn't give back 1 percent. They got every single penny of their money coming to them, while everybody else is asked to be squeezed. There's something profoundly sick about how the system is currently operating.

CAVUTO: All right. Well, we're watching it. And, Newt, you brought up a good point on this other stuff, because trust me, I think you're right, this holding to outside agencies and other bailed-out firms is going to be far bigger than this bonus stuff.

Newt Gingrich, very good having you on. Thank you.

GINGRICH: Thank you.

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