NEW YORK (Bloomberg) - Former Treasury Secretary Henry Paulson has been asked to join his successor Timothy Geithner in testifying before a House panel investigating bailout payments to American International Group Inc.'s (AIG) trading partners.

Paulson was invited to a January 27 hearing set by Edolphus Towns, chairman of the House Oversight and Government Reform Committee, about the decision to fully reimburse AIG's bank counterparties for $62.1 billion in derivatives. Stephen Friedman, the former Federal Reserve Bank of New York chairman who serves on the board of Goldman Sachs Group Inc., has also been asked to appear, Towns said in a statement on Friday.

"Chairman Towns is well aware of the fact that President Bush's Treasury secretary orchestrated this bailout," Jenny Rosenberg, a spokeswoman for the New York Democrat, said in an e-mail explaining why Paulson was invited.

The request widens the probe into what lawmakers have called a "backdoor bailout" of banks that benefited from the $182.3 billion US rescue of AIG. Geithner, who ran the New York Fed when AIG was saved in 2008, agreed to testify before the committee after Darrell Issa, a California Republican, released e-mails last week showing that the New York Fed asked AIG to withhold data about bank payments from filings.

The Federal Reserve and Treasury should be subpoenaed for documents tied to the rescue and attempts at limiting disclosure, Issa said on Friday in a letter to Towns. Towns subpoenaed the New York Fed this week for Geithner's AIG-related e-mails and phone logs after Issa, the ranking Republican on the oversight committee, called for the documents.

"This committee's investigation will not be complete until we gain the perspective of all the most senior government officials responsible for the AIG bailout," Issa said in the letter, in which he called for Federal Reserve Chairman Ben S Bernanke and Paulson to answer questions about the bailout.

Geithner became President Barack Obama's Treasury secretary last year, replacing Paulson, who held the post under President George Bush. New York Fed officials have said that Geithner wasn't involved in limiting public disclosure about the payments to banks including Goldman Sachs and Societe Generale SA.

"You know I haven't looked at those memos actually. I wasn't involved in that decision," Geithner said on Thursday on the CNBC television network. "I do think the Fed did disclose all of that information subsequently. It's important that the American people see all of this information."

Bernanke and Paulson should answer, in affidavits, if they were consulted on the decision to pay banks 100 cents on the dollar for protection tied to sub-prime mortgages and if they knew about efforts to ask AIG to withhold information from filings with the Securities and Exchange commission, Issa said.

Paulson, a former Goldman Sachs chief executive officer, testified in July that he had "no role whatsoever" in the decision to fully reimburse the banks. Michele Davis, a spokeswoman for Paulson, declined to comment. Friedman did not immediately return a request for comment left with his assistant Ginny Cser.

Geithner decided to pay AIG's counterparties for the full value of the underlying assets tied to credit-default swaps even though the bonds had declined in value, according to a November report by Neil Barofsky, the special inspector of the US Troubled Asset Relief Program.

The insurer's rescue "provided AIG's counterparties with tens of billions of dollars they likely would have not otherwise received," Barofsky wrote.

The hearing will also include testimony from Barofsky, New York Fed General Counsel Thomas Baxter and Elias Habayeb, the former chief financial officer of AIG's financial services division, Towns said on Friday.

AIG said in a draft of a filing in December 2008 that it paid banks "100 percent of the par value" for securities tied to the swaps. The New York Fed crossed out the reference to the full payments in the draft, according to the e-mails released by Issa, and AIG excluded the language when the filing was made public on December 24, 2008.