The Chris Dodd AIG Bonus Fiasco
Starting September 2008, the Federal Government began its bailout of the nation's largest insurer, AIG, which would eventually total $200 billion. In March, it was revealed that AIG used bailout money to pay bonuses to 418 employees for $165 million, including $1 million each to 73 individuals.
Ostensibly the Senate's chief financial industry watchdog, Dodd first joined in the chorus of outrage that greeted news of the bonuses. Shortly thereafter, it was discovered that Dodd -- the biggest recipient of AIG campaign cash in 2008 -- wrote the part of the bill that let the bonuses to go forward.
Watch this embarrassing reversal unfold live on national television:
When the AIG bonus scandal first broke, Dodd issued a press release expressing outrage.
“This is another outrageous example of executives - including those whose decisions were responsible for the problems that caused AIG’s collapse - enriching themselves at the expense of taxpayers. A car mechanic or teacher in Connecticut shouldn’t have to subsidize the bad decisions of these executives. Executives at other companies receiving TARP funds have voluntarily foregone bonuses - there’s no reason why those at AIG shouldn’t do the same.” (Press Release, “Dodd Statement On AIG Bonuses,” 3/16/09)
Yet Dodd was responsible for protecting AIG executives' lavish bonuses as part of the $787 billion stimulus package.
While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. That amendment provides an ‘exception for contractually obligated bonuses agreed on before Feb. 11, 2009’ -- which exempts the very AIG bonuses Dodd and others are now seeking to tax. The amendment made it into the final version of the bill, and is law.” (Fox Business, 3/17/09)
At first, Dodd denied inserting the amendment protecting AIG bonuses...
“You received more money from AIG than any other Senator and that you were responsible for the February 11th, 2009 date. And so I just -- you know, again, I just want to get at the fact that...” SEN. CHRIS DODD: “No.” GRIFFIN: “...you’re saying you had nothing to do with that (INAUDIBLE)...” SEN. DODD: “Absolutely not.” GRIFFIN: “And there was nothing that you were doing that was aimed at...” SEN. DODD: “No.” GRIFFIN: “...protecting AIG in particular?” SEN. DODD: “No. Not at all. Not in the slightest. Absolutely.” GRIFFIN: “Because in your -- which has offices, this particular office in the State of Connecticut.” SEN. DODD: “Well, it does. But they have offices all over. But the point is, when that language left the Senate that I wrote, that was not included.” (CNN’s “Situation Room,” 3/18/09)
Then, he admitted that he had in fact, "reluctantly," let the bonus provision back in.
“On Tuesday, Dodd said that he was not a member of the conference committee that crafted the final compromise bill and said that the exception had not been in the bill as he drafted it. But late Wednesday, Dodd admitted in an interview with CNN that he had been involved in the change. ‘I agreed reluctantly,’ Dodd said. ‘I was changing the amendment because others were insistent.’” (Hartford Courant, 3/19/09)
The New Haven Register: "Dodd flat out has lied."
“Now, Dodd flat-out has lied about his role in legislation that is allowing employees of American International Group to receive $400 million in bonuses despite receiving $173 billion in taxpayer money to keep the failed financial giant alive.” (New Haven Register, 3/20/09)
The Payoff: In 2008, Dodd was the #1 recipient of campaign cash from repeated bailout recipient AIG.
(www.opensecrets.org)
AIG executives urged employees to give to Dodd because of his influence over "issues critical to the financial services industry."
The message in the Nov. 17, 2006, e-mail from Joseph Cassano, AIG Financial Products chief executive, was unmistakable: Mr. Dodd was "next in line" to be chairman of the Senate Banking, Housing and Urban Affairs Committee, which oversees the insurance industry, and he would "have the opportunity to set the committee's agenda on issues critical to the financial services industry. ... Mr. Dodd's campaign quickly hit pay dirt, collecting more than $160,000 from employees and their spouses at the AIG Financial Products division (AIG-FP) in Wilton, Conn., in the days before he took over as the committee chairman in January 2007. (The Washington Times, 3/30/09)
View the e-mail:
