In a complete reversal, Sen. Chris Dodd admitted he inserted language into the stimulus bill allowing $165 million in bonuses to those AIG executives. But the President made him do it!
Dodd, chairman of the senate banking committee, finally admitted to CNN (see clip) that his stimulus amendment allowed the universally-reviled bonuses, which went to the very AIG executives responsible for tanking the company.
In talking to CNN, Dodd used excruciatingly boring legislative/parliamentary language, probably to try and put the audience to sleep. But his argument boils down to this: The Obama administration asked him to put the bonus language in, and Dodd was afraid all other executive compensation limits would be stripped from the stimulus package if he didn't comply. He didn't do it because, you know, AIG executives and political action committees donated all that money to the Connecticut Democrat.
It looks like there's some actual truth behind this buck passing; following Dodd's admission, the president said at a town hall meeting in California, "I'll take responsibilty. I'm the president."
Also, "a Treasury Department official told CNN the administration pushed for the language."
That points to Treasury Secretary Tim Geithner as the one who pushed Dodd to allow the bonuses. That would make sense; at the New York Federal Reserve, Geithner served as a bridge between Wall Street and federal monetary regulators. Top finance executives like Jamie Dimon of JP Morgan Chase sat on his board.
Geithner was also said to be instrumental in arranging the bailout of Bear Stearns — and of AIG.
He's been something of an embarrassment to Obama. His senate confirmation hearings revealed Geithner had not paid self-employment taxes for several years. Then there was his disastrous bailout press conference, lacking the rich details promised by no less than the president himself the day before.
Now comes evidence Geithner was instrumental in allowing most outrage-stirring act of corporate greed in some times. It seems likely Obama's "complete confidence" in Geithner will be transformed into the Treasury Secretary's inevitable firing even sooner than we thought.