The Federal Reserve Bank of New York told American International Group to withhold details from the public about more than $62 billion the insurer paid to banks at the height of the 2008 financial crisis, according to emails disclosed Thursday by congressman Darrell Issa (R., Calif.).

AIG said in a draft of a regulatory filing that it paid banks including Goldman Sachs and Societe Generale 100 cents on the dollar for credit-default swaps they bought from the insurer's derivatives unit AIG Financial Products.

The swaps were sold as protection against defaults on complex mortgage-related vehicles known as collateralized debt obligations, or CDOs. As the housing meltdown grew into a full-blown financial crisis, AIG was forced to post billions of dollars in collateral on these contracts, pushing it to the brink of collapse.

The insurer was saved by the federal government, which committed more than $100 billion in taxpayer money to the bailout. A lot of that money was quickly transferred to major banks that were counterparties on the CDO-linked derivatives. The bailout has been among the most controversial of the financial crisis because the banks were paid 100 cents on the dollar during a period when many similar obligations were being settled at large discounts.

The emails disclosed Thursday suggest the New York Fed, at the time led by current Treasury Secretary Timothy Geithner, was concerned that the decision to pay 100 cents on the dollar would be controversial.

"The AIGFP counterparties received 100% of the par value of the Multi-Sector CDOs sold and the related CDS have been terminated," AIG wrote in a December draft of a Securities and Exchange Commission filing.

The New York Fed crossed out the reference, according to emails disclosed Thursday by Issa, ranking member of the House Oversight and Government Reform Committee.

"The outstanding question is why the [New York Fed] didn't fight for a better deal for the American taxpayer," Issa said in a statement Thursday. "Clearly, the New York Fed wanted to suppress details and limit disclosure of the counterparty deal from the American people. The only question is why?"

"If AIG's securities lawyers determine that AIG is legally obligated to make a particular filing or disclosure, then that is what AIG must do," Federal Reserve Bank of New York General Counsel Thomas Baxter said in a statement.

It was "appropriate" for the New York Fed to weigh in on AIG's disclosures because Maiden Lane III, a New York Fed entity, was an integral part of the transactions that settled the insurer's CDS obligations, Baxter added.

Still, "the final decision rested with AIG's securities counsel," Baxter said.

AIG spokeswoman Christina Pretto declined to comment.

Other major AIG counterparties that got big payments include Bank of America Corp., Merrill Lynch and Deutsche Bank AG.

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