Now that the truth has surfaced on who did what to protect those AIG bonuses, Chris Dodd ought to resign or commit suicide ... and I mean that in a Sen. Grassley sort of way.
For all you who defended this lousy deal, here is your truth:
WASHINGTON (AP) — For a while, the disappearance of an executive bonus restriction from last month's economic stimulus looked like sleight of hand worthy of a Las Vegas stage. No one could explain how the provision faded into thin air.
On Wednesday, Sen. Chris Dodd, D-Conn., acknowledged that his staff agreed to dilute the executive pay provision that would have applied retroactively to recipients of federal aid. Dodd, the chairman of the Senate Banking Committee, told CNN that the request came from Obama administration officials whom he did not identify.
The provision was the subject of new attention this week because, had it survived, it would have prevented the American International Group Inc. from granting $165 million in bonuses to employees of its financial products division.
While the House and Senate reconciled their different stimulus bills last month, the Treasury Department expressed concern with a Senate restriction on bonuses, noting that if it applied to existing compensation contracts it could face a legal challenge.
"The alternative was losing, in my view, the entire section on executive excessive compensation," Dodd told CNN. "Given a choice, this is not an uncommon occurrence here, I agreed to a modification in the legislation, reluctantly."
An administration official said Treasury made Dodd's staff aware of the potential for litigation but did not demand that the provision be removed from the final bill. The official spoke on the condition of anonymity because he was not authorized to discuss the matter in public.
The legislation does include a provision that allows Treasury to examine past compensation payments to determine if they were "contrary to the public interest." Treasury Secretary Timothy Geithner on Tuesday said he was using that provision to determine whether the government could somehow recoup the AIG bonuses.
Over the years, Dodd has been the top recipient of campaign contributions from AIG employees. During 2007-2008, when he ran for president, he received nearly $104,000 from AIG employees and their families, according to the Center for Responsive Politics, a nonpartisan group that monitors money in politics.
In a statement, his office said Dodd only became aware of the AIG bonuses in the past few days. "To suggest that the bonuses affecting AIG had any effect on Sen. Dodd's action is categorically false," Dodd spokeswoman Kate Szostak said.