This Dodd/AIG business is becoming as convoluted and unhelpful as the Alberto Gonzalez attorney firings. More and more it appears that Dodd, although the beneficiary of big bank money for decades, was actually the "good guy" who pushed from the start for strict pay limits on execs from institutions who take bailout money (both future and retroactive). But it was Obama's Clinton-carryover economics advisor Summers and controversial Treasury pick Geithner, both with deep ties to Wall Street, whose offices pressured Dodd to include AIG exceptions in the bill.
http://www.salon.com/opinion/greenwald/
Regardless of who initiated what, the Obama White House's Bush-like rationale for toning down Dodd's pay limits was that they feared (a) it would discourage banks from participating in the bailout, and (b) a legal firestorm if they were to modify pre-existing private labor contracts. But the following experts on NYT suggest that excuse b ("the sanctity of labor contracts") is rubbish. Labor agreements get modified all the time without much outcry, especially involving labor unions.
http://roomfordebate.blogs.nytimes.com/2009/03/17/when-bonus-contracts-can-be-broken/
But now that the poop has hit the fan, the White House is pinning the blame on Dodd, and Obama "didn't know anything". So either the president needs to rein in his people, or he needs to level with the country.
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UPDATE III: I'm receiving email regarding the remarks Dodd made today on CNN in which he stated that, at the White House's insistence and over his objections, he agreed to include the pre-February, 2009 carve-out in the stimulus bill. Some of these emailers have suggested that Dodd's comments are at odds with what I wrote. They quite plainly are not.
The narrative I wrote here (and which Hamsher wrote in her post) both included exactly that sequence:
That was the exact provision that Geithner and Summers demanded and that Dodd opposed. And even after Dodd finally gave in to Treasury's demands, he continued to support an amendment from Ron Wyden and Olympia Snowe to impose fines on bailout-receiving companies which paid executive bonuses."
I explicitly wrote that it was Dodd who, after arguing vehemently against this provision, ultimately agreed to its inclusion. And the statement from Dodd's office that I quoted above included the same series of events ("Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made, including adding the exemption"). That's exactly what Dodd said today on CNN.
The point was -- and is -- that Dodd was pressured to put that carve-out in at the insistence of Treasury officials (whose opposition meant that Dodd's two choices were the limited compensation restriction favored by Geithner/Summers or no compensation limits at all), and Dodd did so only after arguing in public against it. To blame Dodd for provisions that the White House demanded is dishonest in the extreme, and what Dodd said today on CNN about the White House's advocacy of this provision confirms, not contradicts, what I wrote.
UPDATE IV: From the CNN article on the Dodd interview:
Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.
Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language. . . .
I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."
It was the Treasury Department -- at least according to a Treasury official granted anonymity for the extremely compelling reason that he "asked not to be named" -- that pushed for the carve-out, and did so over Dodd's objections. That was the point from the beginning. That's precisely what made it so outrageous that the administration was trying to blame Dodd for a provision which Obama's own Treasury officials advocated, pushed for and engineered.
Anyone who doubts Dodd's opposition should just go read the above-excerpted articles which reported contemporaneously about the dispute Dodd was having with the White House over the scope of the compensation limits. For obvious reasons, those real-time accounts are far more instructive about what really happened than what the parties are saying now that everyone is trying desperately to avoid blame for the politically toxic AIG bonus payments.
-- Glenn Greenwald
And some hilarious "flip flopping" from the GOP over pay limits and AIG bonuses, courtesy of Lis and Salon. But this is somewhat typical and expected of a wounded, opportunistic party out of power, and desperate for a comeback.
Sen. James Inhofe (R-OK) in Feb:
“I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?”
[Huffington Post, 2/6/09]
Sen. James Inhofe (R-OK) in Mar:
“The AIG situation is clear evidence of what happens when you shovel money out the door with no strings attached and no transparency.”
[KTUL, 3/17/09]
======================
Sen. Kit Bond (R-MO) in Feb:
“The worst thing we can do is tell businesses how to run themselves. Congress has a pretty bad track record. If you you look at our collective judgment, all 535 of us in our wisdom can’t run government very well. (We) sure can’t run business.”
[STL Today, 2/2/09]
Sen. Kit Bond (R-MO) in Mar:
“It’s unacceptable to pay bonuses after the American taxpayer was forced to bail out an institution without reforming it.”
[KRCG, 3/18/09]
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Rep. Peter King (R-NY) in Feb:
“No, I will say, I agree there should have been some caps. (But) I think this (Dodd’s provision on limiting executive compensation)
went too far, and I think it can be counterproductive.”
[ABC News, 2/15/09]
Rep. Peter King (R-NY) in Mar:
Q: “Should Congress, should the White House be getting a way for these contracts to be broken?”
KING: “Congress should find a way to do it or the administration should lean on them in a way to get – to have it done.”
[MSNBC, 3/17/09]
http://www.salon.com/opinion/greenwald/
