This past week, members of the Senate Banking Committee continued trying to break the Fed’s stonewalling on I.D.-ing who’s been getting all the bank bailout bucks…besides the names we DO know. So far the Fed has absolutely refused to cooperate, saying that to do so would do irreparable harm to those institutions. The committee has demanded this information, to no avail.

We know insurance giant-turned-Vegas-player AIG has received over least $173 billion of taxpayer money so far. Today, the Wall Street Journal, citing a confidential document and insider info, let the world know who some of AIG’s counter-party players are. Quoth the Journal:

The beneficiaries of the government’s bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germany’s Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Societe Generale SA. More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC, and HSBC Holdings PLC.

The AIG bailout helped prevent the names above from incurring immediate losses on mortgage-backed securities and other assets they had insured through AIG. The bailout provided AIG with cash to pay the banks collateral on the money-losing trades; it also bought out underlying mortgage-linked securities, many of which are, as we said in the biz, tits-up.

Banks and other financial companies were trading partners of AIG’s Financial Products Unit. This AIG unit sold credit-default swaps, which acted like insurance on complex derivative securities backed by mortgages. When the securities tanked last year, AIG was forced to post billions of dollars in collateral to counter-parties to back up its promises to insure them against losses.

AIG also generated big business helping European banks lower the amount of capital, required by regulations, to cushion against losses on pools of assets like mortgages and corporate debt. It did this by writing swaps that “insured” those assets. Regulators bought the idea, trading the requirement to have actual capital reserves in the bank for an insurance promise from AIG.

Those banks are in trouble too, big trouble. Values of the assets insured by AIG are declining, forcing the company to post collateral against those positions. If the portfolios incur losses, AIG will have to compensate the banks. The company THOUGHT this practice was a pretty safe bet. Obviously, they thought wrong. A Merrill report concluded that if AIG defaulted, banks that made use of the insurer’s business to reduce their regulatory capital, most of which were headquartered in Europe, would have been forced to bring $300 billion of assets back onto their balance sheets.

Goldman Sachs, however, is smelling like a rose, thanks to Paulson and Turbo-Tax-Timmy.

AIG’s derivative exposure is well into many trillions of dollars. Not to be a broken record, but the bailouts are like pissing on a bonfire. Wait until we talk about the exposure of J.P. Morgan…the Fed’s bank. The press has been fairly quiet on Morgan, but it makes AIG look like Ford. When it blows, and, unfortunately, I think it will, all bets are off.

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