Financial Criminals Will Pay. Just Ask Senator Shelby

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Well, Citigroup seems to be on the verge of being nationalized.
Citigroup, during my years on the Banking Committee, has always been a huge, troubled child. Twenty years ago the Fed grew them out of a lot of their troubles, and then they became a conglomerate and got into everything, and look at them today. It's a question of will they survive.

You don't think the government would allow Citigroup to fail, though, do you?
I don't think they would, but they should.

Efforts to restore liquidity to the credit market by bailing out banks haven't worked. Where does that leave us?
It hasn't worked at all. And I'm not sure that the Fed, led by Chairman Bernanke, knows where it's going. I believe they're in uncharted waters. The chairman has basically said that before. They're printing money. The Fed is supposed to be the lender of last resort. It looks like in some instances it's the first resort. I don't know how much more capital they can expend without some serious questions around the world being asked about the health of the Fed and our monetary system.

What about AIG (AIG)? Washington just spent some $140�billion to prop up AIG. A good chunk of that apparently went to the counterparties, significantly Goldman Sachs. Do you think saving Goldman from taking a major hit was part of the rationale for bailing out AIG?
There are a lot of unanswered questions. We don't know where all the money went, what it was used for, who profited from it, who really benefited—because it certainly hasn't benefited the American people yet. So the Inspector General of TARP [Neil Barofsky] is looking at all that, and he told the Banking Committee he's going to report back to us on where every dime went, who benefited, and so forth. And I think it's going to be interesting reading, whether it's Goldman Sachs, conflicts of interest, or an old boys' network, as they used to call it. There was no transparency. There was no accountability.

It has been reported that [Treasury Secretary Timothy] Geithner and [his predecessor Henry] Paulson in many cases orchestrated some of the deals we saw, such as Bank of America (BAC) and Merrill Lynch, and now BofA just fired [former Merrill CEO] John Thain.
I don't know what happened between Bank of America and Merrill Lynch, or John Thain and [BofA CEO] Ken Lewis, but they were obviously losing billions and billions of dollars. Maybe, when Bank of America took over Merrill, they were doing that at the behest of the regulators. Maybe it was too fast. Maybe Bank of America didn't realize what was in Merrill Lynch's portfolio. Maybe they're finding out the hard way.

Some have said that if Geithner hadn't been confirmed, [National Economic Council Director] Larry Summers would have gotten Treasury.
There's been a lot of talk around here about that. But Summers might be waiting for the Fed. You never know.

You mean down the road after Bernanke?
Who knows?

Maria Bartiromo is the anchor of CNBC's Closing Bell.