of the bills. So it was Dems who somehow removed the provisions (unless you think some Repug slipped in at 3 am and zapped the provisions--or watered them down).
Treasury Attempts to “Blame Dodd” for AIG Bonuses
By: Jane Hamsher Tuesday March 17, 2009 1:15 pm
As Geithner tries to get out of the way of the AIG bonus train wreck, it looks like the designated sin eater is going to be Chris Dodd:
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.
So Treasury says Chris Dodd did this? In a word. . . no.
What they're talking about is a clause in the American Recovery and Reinvestment Act, which was signed into law by President Obama on Feburuary 17, and places limits on executive compensation for TARP recipients. According to the white paper obtained by FDL written by AIG to explain its legal justification, the $1.2 billion in bonuses they say they are contractually obligated to pay in 2009 are exempt from these limits:
........................
Who pushed back against Dodd, and told him to neuter the provision? The WSJ says Geithner and Summers:
Quote:
The administration is concerned the rules will prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness. Both Treasury Secretary Timothy Geithner and Lawrence Summers, who heads the National Economic Council, had called Sen. Dodd and asked him to reconsider, these people said.
The Hill has more: ............................
http://firedoglake.com/2009/03/17/tr...r-aig-bonuses/.................
Washington knew AIG was preparing to pay bonuses
By JULIE HIRSCHFELD DAVIS,
Tue Mar 17, 9:04 pm ET
WASHINGTON – Cue the outrage. For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off government bailouts. It wasn't until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back.
.....................
Around the same time, Congress and Obama's team were passing up an opportunity to put in place strict laws to revoke bonuses from recipients of the $700 billion Wall Street bailout. In February, the Senate voted to add such a proposal to the economic recovery bill that cleared Congress, but in final closed-door talks on the measure, that provision was dropped in favor of limits that affect only future payments.
"There was a lot of lobbying against it and it died," said Sen. Ron Wyden, D-Ore., who proposed the measure with Republican Sen. Olympia J. Snowe of Maine. He said Obama's team is sending mixed messages on what will and won't be tolerated on bonuses, with the president coming out strongly against excessive Wall Street rewards but top officials not following through.
"The president goes out and says this is not acceptable, and then some backroom deal gets cut to let these things get paid out anyway," Wyden said. "They need to put this to bed once and for all."........................
Read more:
http://news.yahoo.com/s/ap/20090318/..._did_they_know ;_ylt=Anb503rUj04SRI4KffgLQBayFz4D
........
and some history:
From Senator Snowe's website:
Snowe-Wyden Amendment Will Recover Taxpayer Dollars Paid-Out as Wall Street Bonuses
February 4, 2009
Washington, D.C. -
Financial institutions that used "federal bailout" funds to pay employees bonuses in excess of $100,000 will be required to compensate taxpayers under a provision that will be introduced today by U.S. Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine). The provision – which the Senators will offer as an amendment to the American Recovery and Reinvestment Act of 2009 – will require financial institutions that received funds from the Troubled Asset Relief Program (TARP) to either repay the cash portion of any bonus paid in excess of $100,000 early – within 120 days of the amendment’s enactment – or face an excise tax of 35% on what is not immediately repaid to the treasury.
"It’s not enough to say these bonuses are wrong – they must be paid back," said Wyden. "To get our economy moving again, the American people must regain confidence in their financial institutions. Protecting taxpayers with this amendment is a strong start."
More at:
http://snowe.senate.gov/public/index..._id=&Issue_id=and today:
Snowe Expresses Outrage over AIG Bonuses and UBS Tax Crimes
March 17, 2009
Washington, D.C. -
At today’s Senate Finance Committee hearing examining Ponzi schemes and other egregious tax evasions, U.S. Senator Olympia J. Snowe (R-Maine) today voiced outrage over the extreme violation of public trust committed by American International Group (AIG) for doling out $165 million in bonuses after receiving a $170 billion bailout from the federal government.
"These bonuses are a staggering insult to the American people," Senator Snowe said. "Clearly these executives need a strong and resounding reality check."
Referring to her amendment with Senator Ron Wyden (D-Ore.) that would have forced financial institutions receiving TARP money to repay bonuses over $100,000 or face a 35 percent excise tax on what is not immediately repaid to the treasury, Senator Snowe commented that if the provision had not been stripped out of the final stimulus package, the American people could reclaim these obscene bonuses.
"The stimulus debate presented an opportunity to enact firm restrictions on the ability of financial institutions receiving TARP funds to provide executive compensation," Snowe continued. "The Snowe-Wyden amendment would have forced AIG to either return the TARP money or pay out the bonuses and incur a 35 percent tax – equating to roughly $58 million. Yet my provision with Senator Wyden was inexplicably stripped out of the final package - leaving us with the unacceptable outcome we face today."
More at:
http://snowe.senate.gov/public/index...7-637922150088Snowe, Wyden Urge Geithner to Re-Examine Executive Compensation Proposal
Initiative Could Have Prevented AIG’s Abuse of Taxpayer Dollars
March 17, 2009
Outraged at American International Group’s (AIG) abuse of taxpayer dollars, U.S. Senators Ron Wyden (D-Ore.) and Olympia J. Snowe (R-Maine) today, in a letter, urged Treasury Secretary Timothy Geithner to re-examine the Wyden-Snowe proposal to force those financial institutions using Troubled Asset Relief Program (TARP) funds to pay excessive bonuses to either return the funds or face an excise tax. A version of the bipartisan proposal -- which was successfully offered as an amendment to the American Recovery and Reinvestment Act -- was regrettably stripped out during House-Senate conference negotiations. Had the initiative been enacted into law, the amendment could have prevented AIG from rewarding top executives in the firm’s financial products division, the same group responsible for engineering risky subprime mortgages, which, in part, led to the collapse of the financial markets.
More at:
http://snowe.senate.gov/public/index...7-62b4beedd66d
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