Treasury didn't simply "demand" Dodd loosen any restrictions so these bonuses could be paid. He informed Dodd his legislation was flawed and would only lead to more trouble, including expensive law suits.
AIG is a Democratic scandal, plain and simple. Glenn Greenwald and Jane Hamsher are doing what they can to provide cover for Sen. Chris Dodd (D-CT) knowing he's in hot water with Connecticut voters over his "Friends of Angelo" loan with Countrywide, his Irish cottage, and his campaign being funded by bailed out financial companies, including AIG (which supported Obama as well; AIG also supported McCain and other Republicans, but they supported Democrats by a 3 to 1 margin). What's worse, the legislation Dodd put in, regardless of whether or not he was coerced to put in the wording by the administration (as asserted by Greenwald and Hamsher), was included as part of the Porkulus fiasco that passed with 303 Democratic and 3 Republican Yea votes.
Democrats own this; so do the hypocrites on the left like Greenwald and Hamsher who exclusively support Democrats. Let everyone know it, and do so often.