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Dodd silent on language in stimulus that allows AIG bonuses

By: Susan Ferrechio
Chief Congressional Correspondent
March 18, 2009

Sen. Christopher Dodd won’t say how a rule he added to the Obama stimulus package ended up allowing AIG to give top executives of the failing company big bonuses.

Dodd spokeswoman Kate Szostak said when the Connecticut senator originally wrote the provision, it did not include the grandfathering of existing bonus agreements such as the ones at AIG. But she declined to say how the language ended up in the final bill — or who wanted it in there.

“Because of negotiations with the Treasury Department” and House and Senate lawmakers who worked on the final bill, Szostak said, “several modifications were made, including adding the exemption, to ensure that some bonus restrictions would be included in the final stimulus bill.”

Szostak said Dodd wanted the bill to allow taxation of the bonuses, but that idea was rejected.

Dodd, she said, “was completely unaware of these AIG bonuses,” and it is “categorically false” to suggest Dodd orchestrated the exception to allow the bonuses to be handed out.

The language was dropped into the $787 billion stimulus bill as part of an executive pay restriction provision crafted by Dodd that aimed to ban bonuses for the highest-paid employees of companies that accepted bailout money from the government.

Under Dodd’s provision, employees who are eligible for bonuses are limited to long-term restricted stock with a value no greater than a third of an employee’s total annual pay.

But the Dodd amendment also includes this line: “There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.”

According to AIG officials, who sent a letter explaining the bonuses to Treasury Secretary Timothy Geithner last week, the company was contractually obligated to made the payments, which amounted to $165 million.

Lawmakers fumed over the payments Tuesday but were unaware of the exception provided in the stimulus bill they voted on that makes them perfectly legal.

“That’s the first I’ve heard of it,” Sen Ben Nelson, D-Neb. said.

Senate Republican leaders were also unaware of it, but in the House, at least two GOP freshmen said they were angered by the provision.

“That was a fatal flaw” in the stimulus bill, said Rep. Leonard Lance, R-N.J.

Rep. John Fleming, R-La., complained that members did not have enough time to comb the massive stimulus package before voting on it.

“That’s one little line item I never got to read,” he said when told of the exception provision.

Dodd’s state of Connecticut is home to a large division of AIG, which has given the former Democratic presidential candidate more money than to any other lawmaker. Dodd received more than $101,000 in campaign donations from AIG employees in 2008 and $223,000 since 2003, according to OpenSecrets.org.



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Reader Comments

All comments on this page are subject to our Terms of Use and do not necessarily reflect the views of the Examiner or its staff. Comment box is limited to 250 words.

dennisl59

Mar 18, 2009

Let me see if I have this straight: 1)Dodd put the bonus provision in the Senate version of the Bill. 2)The Bill went to the Conference. 3)The provision was removed. 4)No one on the Senator's staff or the Senator, himself, checked the bill to see if it was still there. 4)Final bill voted on(again) by both the House and the Senate and passed 5)Sent to the President for signature. 6)Bill signed to law. My conclusion? The Senator Dodd and his staff are totally, completely, utterly and finally responsible for the outcome. No one else. Them and them alone. So, how long can they play stupid? Anyone? Thank You.

 

ensignbay

Mar 18, 2009

This entire AIG bonuses controversy is a Marxist tactic to divert attention from the REAL controversy: The massive governmental power grab by the Obama administration and the massive increase in spending in all areas of government. ------------------------

 

Get Him Out

Mar 18, 2009

As a CT resident I have to confess this man is a slim ball and needs to go. He has done nothing but bring disgrace to the state.

 

frederick c. norton

Mar 18, 2009

Let's see?! Dodd gets $223,000 in contributions from AIG employees and uses the TARP funds to pay back his friends. Impeachment?

 

bungar

Mar 18, 2009

let's see the three highest paid AIG bonuses are going to three individuals that live in CT, James Hass and Douglas Poling both of Fairfield, Conn and Jonathal Liebergall of New Canaan. who's in bed with whom

 

Mike

Mar 18, 2009

Chris Dodd has been on TV all afternoon trying to lie his way out of the mess he created. Let's see how Obama reacts during his Town Hall in California. Some heads will roll!

 

kelley1

Mar 18, 2009

The people of Connecticut should be proud of Sen. Dodd. He got his pork and ate it to. He should be held responsible, but the good people of Connecticut could care less. he'll be elected again and again and screw the tax payers.

 

gordy

Mar 18, 2009

Uhh gee..............I think I can some it up in one word - complicity.

 

LEE Allman

Mar 19, 2009

I cannot believe what he's done. When if ever are these pathetic politicans who are voted into office, going to stop raping this Once beautiful country of everything it stands for just to line their own pockets.I was born, bread and brought up in Ct.I always admired Sen. Dodd. NO More. Exactly how stupid do these greedy jerks think we are. I have never been more outraged and embaressed of my country. No wonder the World hates us. GOD help them all for their GREED. Those to much is given,MUCH IS EXPECTED!!! GOD BLESS WHATS LEFT OF MY BELOVED COUNTRY!!!

 

pru

Mar 20, 2009

Sen Dodd is shameless liar who knows he can continue to rely on the mindless electrolate to keep him in office. The people of nutmeg brains.

 

Mar 20, 2009

You sign a bill that you didn't read and now you are surprised that there is something flawed in the bill? Duh!

 


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