What better way to try and show that your institution isn't secretive and didn't act like it was above the law in its efforts to stabilize the economy than to tell a government watchdog agency to investigate you?

That's essentially what Federal Reserve Chairman Ben Bernanke did Tuesday in sending a letter to the acting head of the Government Accountability Office requesting such a probe of the Fed's actions in bailing out American Insurance Group.

An excerpt:

The Federal Reserve has made public a large amount of information about this transaction, its terms, and its value and about the related actions we have taken regarding AIG. The Federal Reserve also provides to the public and the Congress a monthly report about the AIG-related credit facilities and publishes a weekly update on the amount outstanding under each of these credit facilities. The Federal Reserve has also provided significant information about its lending actions regarding AIG to the Congress in testimony and correspondence, to the GAO in connection with its original report in September 2009, and to other oversight bodies such as the Special Inspector General for the Troubled Asset Relief Program.

We have provided and continue to provide this information because it is important that the Congress and the public understand that, in our actions regarding AIG, the Federal Reserve and the Treasury acted in the best interests of the United States to preserve the financial system and to protect households and businesses from potentially calamitous effects on the U.S. economy, while doing everything possible to protect the American taxpayer.

 

In this spirit, to afford the public the most complete possible understanding of our decisions and actions in this matter, and to provide a comprehensive response to questions that have been raised by members of Congress, the Federal Reserve would welcome a full review by GAO of all aspects of our involvement in the extension of credit to AIG. GAO is authorized to conduct this review under its current authority (31 USC 714(e)).

Bernanke's letter comes with the Senate expected to take up his renomination for the post as soon this week.