Not many people know that General Electric has been a huge beneficiary of recent bank bailouts via its financial subsidiary GE Capital, which would be America’s eighth largest bank measured by total assets. Regulators changed banking rules to guarantee $340 billion in GE Capital debt, and the bank received $16 billion in cheap emergency loans from the Federal Reserve, according to Fed data released in December. All the while GE’s CEO, Jeff Immelt, was on the board of the NY Fed (along with another former GE executive) and a member of Obama’s economic advisory board. The conflicts of interest are obvious and, as one Fed historian put it to the NY Times, “ugly”.

Immelt and Obama talking business in a GE factory

After $40 million in lobbying last year, more than any other company, the returns on GE’s political investments are still flowing. Immelt was with Obama in India a few months ago when he negotiated a $10 billion export deal benefitting GE, and Obama stood at a GE plant in New York as he named Immelt to lead his new economic advisory council, which looks like it will focus on making America’s laws, taxes, and labor force even more business-friendly.

Interestingly, the deep conflicts surrounding Obama’s promotion of Immelt have provoked the strongest criticism from libertarian think tank FreedomWorks, which has close ties to the billionaire brothers Charles and David Koch. The Kochs are energy moguls notorious for their financing of dozens of free-market political forces, from free-market think tanks to Tea Party affiliates. Jane Mayer’s New Yorker article about the Koch brothers shows how their influence through political and nonprofit financing is both unequalled and self-interested. The Kochs are fiercely opposed to bank bailouts, economic stimulus, and climate regulation. Immelt has been a high-profile supporter of all of these — perhaps because they’ve profited GE — and GE’s campaign contributions have leaned Democratic in recent years. That’s probably why he’s so close to Obama, and why the Koch brothers and groups like FreedomWorks want him to go away.

FreedomWorks and the NCPPR, another free-market think tank, have launched a campaign to “dethrone” Immelt from GE, calling him the “king of crony capitalism”, and are running ads attacking Immelt’s conflicts of interest as a blatant sign of corruption. “It’s time to break up the unethical romance between government and big business,” said FreedomWorks President Matt Kibbe in a statement. “For too long, corporate elites have lobbied to profit from the size and growth of government at the expense of hard-working Americans.”

FreedomWorks has it wrong. It’s not the size and growth of government that ensured minimal financial regulations and generous bailouts for well-connected banks like GE Capital, it’s the size and growth of finance and its influence over government. Relative to expanding financial markets, regulations and regulatory bodies are not growing, they’re shrinking. Still, FreedomWorks can apparently exploit anger about Obama’s dirty dancing with bailed-out corporate elites to rally support for further dismantling of government oversight and regulation.

The beast of corporate power is feeding off its own corruption.

Claire McCaskill has suggested that she will oppose the Fed audit admendment. This represents a flip-flop, as the Senator from Missouri voted for the Fed audit back in April.

One possible explanation for the shift: one of McCaskill’s top donors is Steven H Lipstein, chair of the St Louis Federal Reserve. Lipstein has given McCaskill and her committees $16,000 since she first ran for the Senate in 2006, including $11,200 for that campaign, the sort of outrageous sum that illustrates the complete meaninglessness of campaign finance limits. In February 2010, he gave her $4800, maxing out to both her primary and general accounts. His wife, Susan Lipstein, donated $2100 to McCaskill during her 2006 campaign.

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Goldman Sachs appears to be testing the limits of its special talent for avoiding all accountability following revelations of its role in exacerbating the Greek debt crisis.

The bank has come under heavy criticism from European political officials over its role in helping Greece hide its debts, and on Wednesday, Greek labor unions staged a historic strike that shut down the country’s national infrastructure in response to economic policies urged by bankster elites. The European turmoil has forced US officials to take notice, and scrutiny of the bank is now coming from the unlikeliest of quarters, with Ben Bernanke telling Congress on Thursday that the Federal Reserve is looking into Goldman and questions surrounding the bank’s swap transactions with Greece.

Bernanke was vague about what, exactly, the Fed is investigating, and it is possible that the inquiry will go nowhere. But the fact that the Fed chair would make remarks that amplify concerns about Goldman’s role in Europe is a sign that the political winds have shifted significantly since Matt Taibbi’s “vampire squid” metaphor first captured the public imagination last summer. The populist outcry against bankster fraud and collusion finally shows signs of steering the authorities towards a more oppositional, watchdog role.

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The same lobbyist that sold Washington on Enron is now touting Ben Bernanke. According to Politico, former Enron lobbyist Linda Robertson has been managing Bernanke’s confirmation effort on behalf of the Federal Reserve — coaching him through the process in much the same way she coached Ken Lay and Jeff Skilling through the Washington influence game.

Robertson played a key role in some of Enron’s most scandalous moments in the year prior to its collapse. For starters, she was at the center of negotiations involving the highly secretive energy task force headed by Vice President Dick Cheney.  A review of Enron email shows that Robertson guided Lay through pivotal meetings with Cheney and other officials, and actually authored the Enron memo and talking points that were later integrated into Cheney’s controversial energy plan.

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Bloomberg reported yesterday that the New York Fed pushed AIG to withhold key information about bonuses and swap counterparties in late 2008.  Today, the story is blowing up, with the New York Times, Wall Street Journal, and a range of other outlets picking up on the story.

There is an incredible conflict of interest at the heart of the AIG-New York Fed dealings: the very same New York Fed lawyers who pushed AIG to withhold the names of counterparties also advised Goldman Sachs on large deals in 2008.

Goldman Sachs was one of AIG’s largest counterparties, and received a controversial 100% payout on its swap contracts with the firm.

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