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AIG's Bonuses: Who Knew What -- and When
Dodd blasts back, says people are tired of "politics of personal destruction."
March 20, 2009— -- It is not yet entirely clear who know what and when exactly they knew it in the Obama administration and in Congress about the AIG bonuses.
But new details are starting to emerge.
There were a number of people in the federal government who knew about the AIG bonuses before last week, when the administration says President Barack Obama and Treasury Secretary Timothy Geithner were supposedly first made aware.
Geithner was asked about the precise details and the full scale and scope of the bonuses at a public hearing of the House Ways and Means Committee on March 3.
His exchange that day with Rep. Joseph Crowley, D-N.Y., suggested that Crowley knew the precise details of the bonuses as well.
"Just last month, AIG paid 343 employees of AIG FP -- their financial products division that created the financial hole that AIG is in, and in turn a multibillion-dollar bill for American taxpayers -- $56 million in bonuses and are slated to pay an additional $162 million in bonuses to 393 participants in the coming weeks," Crowley said. "And there's more. Further bonus payments totaling approximately $230 million are due to 407 participants at AIG's financial products division in March 2010."
Crowley added that the decision "makes no sense to my constituency," saying, "this company claims to be on the brink of disaster and it's handing out bonuses."
The lawmaker said he wanted to work with Geithner on efforts that would, in part, void future bonuses "as well as claw back $56 million in bonuses already paid to AIG FP employees between December 2008 and 2009, some of whom are not even American citizens but who are living large on taxpayer funds."
Geithner responded: "We are now in the process of designing regulations, guidelines to apply those provisions, and we're going to be as careful and responsive as we can to the concerns you have, [that] so many Americans have, about how these resources have been used."
Geithner added that board members and executives "have a deep responsibility and obligation to make more careful judgments going forward."
Sen. Christopher Dodd, D-Conn., faces criticism for changing a provision in February's stimulus bill that exempted retention bonuses agreed to before Feb. 11 from a ban on such bonuses.
Today, Dodd blasted back against the blame being hurled his way in the bonus flap and said he wished someone at the Treasury Department would have stood up for their actions before Geithner told CNN's Ali Velshi Thursday that his staff worked with Dodd on a provision that paved the way for the bonuses.
Geithner's explanation came after Dodd said the Treasury Department had insisted on inserting language in the bill that created an apparent loophole for AIG to exploit.
"Treasury staff did express concern about whether this provision was vulnerable to legal challenge," Geithner said.
Dodd said today that he regretted his role in allowing the bonuses.
"Had anyone had suggested to me, anyone, in the process of doing this, the design was to protect bonuses for a handful of bonuses at AIG or anywhere else for that matter, believe me when I tell you I would have flatly rejected it," Dodd said today at a news conference in Connecticut. "I am not a newcomer to the issue."
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