Dodd: Administration pushed for language protecting bonuses

Dodd: Administration pushed for language protecting bonuses

www.cnn.com

(CNN) -- Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.
Sen. Chris Dodd, D-Connecticut, appears on CNN's "The Situation Room" on Wednesday.

Sen. Chris Dodd, D-Connecticut, appears on CNN's "The Situation Room" on Wednesday.

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language.

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.

"The administration had expressed reservations," Dodd said. "They asked for modifications. The alternative was losing the amendment entirely."

On Tuesday, Dodd denied to CNN that he had anything to do with adding the language, which has been used by officials at bailed-out insurance giant AIG to justify paying millions of dollars in bonuses to executives after receiving federal money.

He said Wednesday that the "grandfather clause" language "seemed like innocent modifications" at the time. Video Watch Dodd's interview with CNN's Dana Bash »

"I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."

Dodd said he did not speak to high-ranking administration officials and the change came after his staff spoke with staffers from Treasury.

The White House did not immediately respond to CNN's request for comment.

On Capitol Hill on Wednesday, AIG chief executive Edward Liddy called the roughly $165 million in bonuses "distasteful" but necessary because of legal obligations and competition.

"We have to continue managing our business as a business -- taking account of the cold realities of competition for customers, for revenues and for employees," Liddy told a House Financial Services subcommittee. "Because of this, and because of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful."






Rep. Barney Frank, D-Massachusetts, said Wednesday that Congress can't just pass a law to abrogate any past contracts because that move would not hold up in court. Instead, he argued the executives don't deserve bonuses under the contract.

"We own this company in effect, and we're not asking that these bonuses be rescinded because we have lent money to the company. I believe we are saying as the owners of the company, we do not think ... we should have paid bonuses to people who made mistakes who were incompetent," said Frank, chairman of the House Financial Services Committee.

(visit the link for the full news article)

I can't believe the idiocy here of these people...

What the hell is wrong with our politicians?

I'm just at a loss for words here.

Can you stand anymore of this?

This guy is a complete dolt... I'm tired of these idiots running things.

Someone needs to remind them that they are representative of us and the American people... ugh... I can't believe this.

www.cnn.com
(visit the link for the full news article)

I'm not really surprised considering the fact that AIG gave about $103,000 dollars to Dodd, an amount which, incidentally, is even more than Obama received.

Source

2 questions

Why the fake outrage by our politicians if they were aware these bonuses would be paid?

Will this turn out to be Obama's first real scandal since Dodd says the administration lobbied for this change?

reply to post by Frankidealist35


"Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language."

I would say the Obama administration has some explaining to do after all the phony shock and outrage earlier in the week. They knew about it all along. Bunch of fools running this country.

There's nothing like watching politicians rat each other out. Dodd just tossed Obama under the bus big time.

This mess is about to go nuclear, it seems. It looks like we're now on the eve of a huge Obama administration scandal.

reply to post by jam321


The purpose of the fake outrage is to seem outraged while diverting public attention from the fact that most of the money AIG received went right out of the country. In fact, I've heard that the bonuses in question amount to about 1% of the money AIG received.

According to this Dodd initially slipped in a provision to limit bonuses, and was at odds with White House officials on that matter.

The CNN article doesn't mention it, but it's also obvious from his comments that he caved in to get the amendment passed.

He said Wednesday that the "grandfather clause" language "seemed like innocent modifications" at the time.

That's the problem with our lawmakers, they are either completely ignorant on these financial and economic matters, or they are just plain incompetent.

And this goes for Republicans too.

As the New York Times reported at the time that TARP was being crafted, "Congress and the administration remained at odds over the demands of some lawmakers, including limits on the pay of top executives whose firms seek help."

Former Treasury Secretary Hank Paulson said that while he was upset with the levels of salary afforded to top executives, any cap on such would dissuade companies from participating in the TARP.

"If we design it so it's punitive and so institutions aren't going to participate, this won't work the way we need it to work," he told Fox News Sunday on September 21.

Senator Richard Shelby, the top Republican on the Senate Banking Committee, told CBS news that: "It should be up to the board of directors of a private corporation to set the compensation of an executive; it shouldn't be Congress's role."

Senator Mel Martinez told CNBC that: "While it is very appealing to think about executive compensation as being a part of this, one of the drawbacks to that is perhaps that we would have fewer entities participate in what is essentially a voluntary act."

And House Minority Whip Eric Cantor, "outraged" over AIG's issuance of $165 million in bonuses, said he was not in favor of "the federal government be[ing] able to set salaries across the board," when the issue of executive compensation arose in September 2008.

The issue extended to when the Obama administration was tasked with writing its own version of the TARP. Senate Minority Leader Mitch McConnell, likewise dismayed over AIG's bonuses this past week, said back in early February that while he was "appalled" at some of the perks executives had received, he did want "the government to take over these businesses and start telling them everything about what they can do."

source

And now everyone acts surprised or oblivious that this would happen.

reply to post by vor78


Obama looks like a damn fool now. He publicly expressed anger about it on Monday and now it comes out that the administration pushed for the bonuses to be allowed. Lets see how he tries to backpedal out of this one.

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