Photo: #2 and #1 recipients of AIG largesse in 2008
"I warned them this would be met with an unprecedented level of outrage," Sen. Christopher J. Dodd (D-Conn.), the chairman of the banking committee and part of a group of senators who pressed Treasury Secretary Timothy F. Geithner to stop the [AIG] bonuses, said yesterday.
The above quotation ran in Tuesday's Washington Post.
Dodd "warned them"? Dodd may have "warned them" all right, but he also authored a provision called, modestly enough, The Dodd Amendment that includes language that protects the very bonuses he is now railing against and seeking to tax. Michelle Malkin has been all over this story, which was unearthed by Fox Business reporter Rich Edson, also yesterday. Edson wrote:
While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.
Of course, Dodd, who...whaddya know?...was AIG's single largest recipient of campaign donations in 2008 with $103,100. Not incidentally, perhaps, Barack Obama was #2 with $101,332. (UPDATE: Worth remembering is that Dodd and Obama were #1 and #3 respectively in Fannie and Freddie campaign donations in 2008, too. Funny.) Dodd says he doesn't know how the AIG bonus-protection got into the, ahem, Dodd Amendment.
“I can't point a finger at someone who was responsible for putting those dates in,” Dodd told FOX. “I can tell you this much, when my language left the senate, it did not include it. When it came back, it did.”
Mirabile dictu! The Dodd Amendment language left the Senate pure; the Dodd Amendment language returned to the Senate defiled.
“Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made,” Dodd Spokesperson Kate Szostak in a response to FOX Business.
The provision excluding those bonus payments made it into the final version of the bill, and is law.
Separately, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org. Also, one of AIG Financial Products’ largest offices is based in Connecticut.
“Senator Dodd was completely unaware of these AIG bonuses until he learned of them in the past few days,” wrote Szostak. To suggest that the bonuses affecting AIG had any effect on Senator Dodd’s action is categorically false.”
And I've got a bridge in Brooklyn to sell--no, make that a cottage in Ireland....
But worse than Dodd's behavior--corruption at worst, malpractice at best (after all, he, along with all Senate Democrats and three Senate Republicans, signed off the $787 billion porkulus package that includes the amendment bearing his name)--is MSM reporting on this matter. Todays' New York Times story is typical:
Late Tuesday, Mr. Geithner and White House officials sent a letter to Congress seeking quick action on legislation to give the government more power to intervene and wind down companies like A.I.G., which are huge players in the financial system, but are not regulated the way banks are.
The administration had planned to seek such regulatory powers as part of a broad revamping of financial regulations, but it is expediting this piece in response to the A.I.G. uproar.
In the letter, Mr. Geithner confirmed that the government would subtract $165 million — the amount of the bonuses — from the latest $30 billion loan to A.I.G. that would bring the total loans to $200 billion, from the original $85 billion.
Notice the $200 billion bailout isn't what has caused the AIG uproar. It's the $165 million in bonuses, which is practically chump change compared to the rest ($200 billion!). I think this is what they call not seeing the forest for the trees. The bailouts were a Bad Idea. Bad Ideas spawn other Bad Ideas--like bonuses to executives whose Bad Ideas shouldn't be propped up by taxpayers until forseeable generations have lived and died, leaving behind a socialist state as our memorial to Bad Ideas.
Mr. Geithner reiterated the Treasury position that lawyers inside and out of government had agreed that “it would be legally difficult to prevent these contractually mandated payments.”
That position was being questioned at the Capitol. Congressional Republicans, eager to implicate Democrats, initially blamed Senator Christopher J. Dodd, the Connecticut Democrat who heads the banking committee, for adding to the economic recovery package an amendment that cracked down on bonuses at companies getting bailout money, but that exempted bonuses protected by contracts, like A.I.G.’s.
Notice there is no reason in the world to "blame" Dodd for protecting AIG bonuses except for "implicating Democrats." The Democrats already implicated themselves (plus the GOP's Spector, Snowe and Collins) by approving the thing, and now, as usual, circling the wagons. (And thank goodness all House Republicans voted against the House version of the bill.) But here's the point.
Mr. Dodd, in turn, responded Tuesday with a statement saying that the exemption actually had been inserted at the insistence of Treasury during Congress’s final legislative negotiations.
And that's the end of that. Dodd said the exemption had been inserted at the insistence of Treasury, so it must be so. (I guess he "forgot" that when the Fox reporter first asked the question and he pleaded total ignorance.) We the people still don't know for a fact where the exemption came from, but notice the mighty NYT is happy to go with the press release.
Maybe they're hoping for a bailout from the Senate Banking Chairman, too.