Congress' Bonus Babies

You are disgraced professional losers. And by the way, give us our money back.

REPRESENTATIVE EARL POMEROY, Democrat of North Dakota (NYT Quote of the day)


Congress' Bonus Babies

By INVESTOR'S BUSINESS DAILY Posted Thursday, March 19, 2009 4:20 PM PT

The AIG Affair: As Barney Frank compiles an enemies list, Chris Dodd confesses he did in fact author the AIG stimulus loophole. So just who is going to go after those million-dollar retention bonuses at Fannie Mae?

There was Rep. Frank, who once whistled past the Fannie Mae graveyard, demanding in full righteous indignation that AIG CEO Edward Liddy tell him where the bonus recipients — and their families — lived and who they were down to the family dog. All that was missing were powdered wigs and a guillotine.

Liddy, brought in for a dollar a year after the market meltdown Frank had a hand in creating, wasn't the one who should have been in the dock. Frank should have been grilling his Senate colleague Chris Dodd, who now admits writing the language in the stimulus that made these bonuses exempt from any government restrictions.

Sitting next to Dodd should have been Treasury Secretary Timothy Geithner, late of the Federal Reserve in New York and the architect of the original AIG bailout. After saying he didn't know who wrote the stimulus language exempting AIG bonuses, he now says he did it at the request of Treasury and administration officials.

"When the language went to the conference and came back, there was different language," Dodd told Fox News on Tuesday. "I can tell you this much: When my language left the Senate, it did not include it. When it came back, it did."

On Wednesday, he told a different story, acknowledging that he and his staff did in fact change the language in the stimulus bill to include a loophole for AIG executive bonuses. "As many know, the administration was, among others, not happy with the language. They wanted some modifications in it.

"They came to us, our staff, and asked for changes, and the changes at the time did not seem obnoxious or onerous," Dodd added.

Say what? Exempting AIG bonuses to be paid out with taxpayer dollars seemed harmless to the No. 1 recipient of AIG campaign cash? Some have called this a "reversal" of position. We call it a lie admitted to.

Dodd said the argument put forward by Treasury was that a "flood of lawsuits" would come forward if the change was not made. The bonuses were contractual obligations.

But who is "they" and just who at Treasury advocated the exemption? Just how is Geithner, who followed the AIG mess from the Federal Reserve to Treasury, now the Sergeant Schultz of the administration, someone who knows nothing and sees nothing?

Also pointing a finger at the "Obama economic team" is Sen. Ron Wyden, D-Ore., who says they are responsible for stripping a provision from the stimulus bill that he and Republican Olympia Snowe of Maine submitted. It would have taxed such bonuses at a 35% rate. Asked who he spoke to about stripping the item, Wyden said, "Secretary Geithner, Larry Summers, and I'll leave it at that."

"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 told the Associated Press. The unanswered questions are who and why?
Now we learn that Fannie Mae, a bailout beneficiary and the ignition source of the mortgage meltdown, plans to pay its own retention bonuses of at least $1 million to four executives as part of a plan to keep hundreds of employees from leaving. Let them work for a buck too.

Just as was the case with Fannie Mae and Freddie Mac, Congress and the administration had a chance to stop this. Instead they protected AIG with a bill written in the middle of the night, sliced and diced by a handful of Democrats in a closed conference room, that those voting on it had not read.

Frank et al. have forgotten how Franklin Raines, who headed Fannie from 1998 to 2004, the years of its worst excesses, pocketed nearly $100 million in pay and bonuses from Fannie. He later became an adviser to Obama, the No. 2 recipient of AIG campaign funds behind Dodd.

This is the administration and Congress that promised to be the most transparent ever. They're transparent all right. We can see right through them.

IBD Editorial