Just when you find yourself wondering if things could get any worse for Chris Dodd, insurance giant AIG, which he recently helped bail out, gives away $160 million of taxpayer money in bonuses to their executives. He must be sitting on his couch right now, rubbing his temples, and just wondering when it is going to let up.
In the New York Times we find an anonymous source from Obama's Treasury Department throwing Dodd under the bus for enabling AIG to get away with this:
The second group of bonuses covers some 208 retention payments from contracts entered into before government involvement in A.I.G. Indeed, in his letter to Mr.Geithner, Mr. Liddy wrote that he had shown the details of the $450 million bonus pool to outside lawyers and been told that A.I.G. had no choice but to follow through with the payment schedule.
The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place. [emphasis added]
The administration blames this all on what they are calling the "Dodd Amendment," the executive compensation amendment to the stimulus bill that included the loophole allowing bonus payments that had already been agreed to prior to February 11.Dodd denies he was the author of that aspect of the provision , but he won't pin it on anyone else, either.
Dodd's original amendment did not include that exemption, and the Connecticut Senator denied inserting the provision.
"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."
This post from FDL does a decent job of demonstrating the blame lies squarely on Obama and Treasury rather than Dodd. But the fact of the matter is that it doesn't matter who is to blame for that particular clause. It is all the rage these days to be outraged about how the bailed-out companies are spending taxpayer money. From the Senator's press release:
This is another outrageous example of executives - including those whose decisions were responsible for the problems that causedAIG's collapse - enriching themselves at the expense of taxpayers. A car mechanic or teacher in Connecticut shouldn’t have to subsidize the bad decisions of these executives.
Seriously, how hypocritical can our politicians be? We are talking about $160 million here. I know that used to be a lot of money, but our new President has spent like 10,000 times that much in the past two months. Literally. These bonuses are only a few years of playing third base for the Yankees. As John at Powerline pointed out, the earmarks in the recent stimulus bill accounted for $8 billion, and to run our government costs about $11 billion A DAY.
So I agree with the Senator that the taxpayers should have nothing to do with this. What's Dodd's plan to rectify this injustice? Raise taxes.
Senate Banking Committee Chairman Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing anAIG bonus tax.
This is a classic. Let's spend almost a trillion dollars of taxpayer money, give it to failing companies, then take as much of it as we can back in taxes when they pay it to their employees. Of course, once the government does get it back, it is not as if they are going to send it back to you and me. They'll spend it on saving mice or buying prophylactics to limit the number of consumers draining our economy.
If only our legal system had developed a way for companies that were in financial trouble to restructure themselves and get out of contracts that require payments of millions of dollars of bonuses to the people who crashed the company without raping the American taxpayer. Like this.
As all of this mess were not bad enough for Dodd, the world has yet another reason to be reminded that he was the top recipient of campaign contributions from AIG, closely followed by President Obama.
Looking back at the past year, it is difficult to comprehend how Chris Dodd has managed to survive in politics over the past three decades. It is time for him to go.
UPDATE: I swear to you I am not making this up... Treasury Secretary Timothy Geithner has demanded that AIG pay back the $160 million in bonuses with taxpayer money that the government will give them in the near future. Unreal.
Cross-posted at The Artful Doddger.