The attempt to blame Dodd is based on a patently false claim that was first fed to The New York Times on Saturday by an “administration official” granted anonymity by Times reporters Edmund Andrew and Peter Baker (in violation, as usual, of the NYT anonymity policy, since all the official was doing was disseminating pro-administration spin). The accusation against Dodd is that there is nothing the Obama administration can do about the AIG bonus payments because Dodd inserted a clause into the stimulus bill which exempted executive compensation agreements entered into before February, 2009 from the compensation limits imposed on firms receiving bailout funds. Thus, this accusation asserts, it was Dodd’s amendment which explicitly allowed firms like AIG to make bonus payments that were promised before the stimulus bill was enacted. [Lets not ignore the fact that Dodd obviously agreed to the Amendment and until the recent fire storm, never raised a single objection to the demanded changes]
That is simply not what happened. What actually happened is the opposite. It was Dodd who did everything possible — including writing and advocating for an amendment — which would have applied the limitations on executive compensation to all bailout-receiving firms, including AIG, and applied it to all future bonus payments without regard to when those payments were promised. But it was Tim Geithner and Larry Summers who openly criticized Dodd’s proposal at the time and insisted that those limitations should apply only to future compensation contracts, not ones that already existed. The exemption for already existing compensation agreements — the exact provision that is now protecting the AIG bonus payments — was inserted at the White House’s insistence and over Dodd’s objections. But now that a political scandal has erupted over these payments, the White House is trying to deflect blame from itself and heap it all on Chris Dodd by claiming that it was Dodd who was responsible for that exemption. [Exactly how hard did Dodd argue – the prohibition mentioned in this article was not authored by Dodd as reported, it was authored by Senator Snow (see below) – that language – language prohibiting bonuses/retention payments was stricken in “behind closed door” meetings at the White House without any public debate or review – This statement is clearly a self serving alibi for Dodd. He, Dodd, is now attempting to spread the blame to those who should rightly share it with him – The White House the Treasury and the Democratically controlled Congress that rammed the legislation through without adequate review or debate]
At that same time, The Hill reported that “President Obama and the chairman of the Senate Banking Committee [Dodd] are at odds on how to rein in the salaries of top executives whose companies are being propped up by the federal government” and that “most of the administration’s concern stems from the Dodd’s move to trump Obama’s compensation provisions by seeking more aggressive restrictions.” Let’s repeat that: the Obama administration was complaining because the compensation restrictions Dodd wanted were too “aggressive.”
Now the Obama administration is feeding reporters the accusation that it was Dodd who was responsible for the exemptions that protected already-vested bonuses. The Times article from Saturday that started the Dodd scandal thus contains this outrageously misleading claim:
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.
And yet another New York Times article from today
(“Fingers Are Pointed Across Washington Over Bonuses”) — this one by David Herszenhorn — contains this White-House-mimicking, misleading passage: “But Mr. Reid mostly ducked a question about whether Democrats had missed an opportunity to prevent the bonuses because of a clause in the economic stimulus bill, part of an amendment by Senator Christopher J. Dodd, Democrat of Connecticut
, that imposed limits on executive compensation and bonuses but made an exception for pre-existing employment contracts.”
That was the exact provision that Geithner and Summers demanded and that Dodd opposed. And even after Dodd finally gave in to Treasury’s demands, he continued to support an amendment from Ron Wyden and Olympia Snowe to impose fines on bailout-receiving companies which paid executive bonuses (which was stripped from the bill at the last minute). But now that Treasury officials are desperate to heap the blame on others for what they did, they’re running to gullible, mindless journalists and feeding them the storyline that it was Dodd who was responsible for these provisions. And today, during his White House Press Conference, Robert Gibbs advanced this dishonest attack by repeatedly describing the offending provisions as the “the Dodd compensation requirements.
“Rather oddly, the NYT
article I quoted above, by David Herzsenhorn, has been moved on the NYT
site and is now at this link
). Most importantly, it has been re-written to reflect that fact that it was not Dodd
who inserted the exception for past contracts:
Something in the last couple of hours caused The New York Times
to change the way it is reporting this matter so that it is no longer mindlessly reciting the false White House attempt to blame Dodd for the bonus exemption, but instead is at least including a version of the truth. http://www.salon.com/opinion/greenwald/2009/03/17/dodd/
The specific terms, amounts and dates of the bonus/retention payments were made known to the White House and Treasury Department on 11/09/2008 – Those disclosures were made in the original AIG bailout agreement signed by AIG and the Treasury Department on that date. Claims to the contrary are simply false.
hypocrisy – hy⋅poc⋅ri⋅sy –
||a pretense of having a virtuous character, moral or religious beliefs or principles, etc., that one does not really possess.
||a pretense of having some desirable or publicly approved attitude.
||an act or instance of hypocrisy.
Origin: Greek – play acting, to play a part. Synonyms: 1. See deceit.
Filed under: AIG, Bailout, Banking, Banking Crisis, Economic Crisis, Economy, Financial Crisis Tagged: | AIG Bonuses, Dodd Points Finger at White House & Treasury, Sen Dodd - White House & Treasury Insisted On AIG Bonuses