Not much more than a year ago, Chris Dodd thought he could be president. Today, he might lose his Senate seat because he's up to his ears in AIG and lied about it.
Dodd received more than $100,000 from AIG employees in the 2007-2008 campaign cycle, making him, according to CNN, AIG's favorite senator. At least two of those donors—Doug Poling and Jonathan Liebergall—worked in the company's Financial Products Division and received $1 million-plus bonuses despite the fact that their work cratered the global economy and required a $180 billion bailout. Both men were outed by the New York Post yesterday; according to the Wall Street Journal, they have decided to return the money.
Given the largesse AIG showered on Dodd, it naturally raised eyebrows this week when reporters noticed that the legal basis by which AIG was allowed to pay out its bonuses could be traced to an amendment that Dodd himself inserted into the stimulus package last month. The so-called Dodd Amendment severely restricted the ability of bailed-out companies to pay out huge bonuses. But it included a provision exempting any bonuses promised prior to February 11, 2009, which spared the AIG payouts. It looked like Dodd had slipped a line into the bill specifically to reward his AIG donors.
But Dodd denied vociferously that he had anything to do with it. Asked by a CNN producer on Tuesday whether he had anything to do with the bonus exemption, Dodd replied: "Absolutely not. No. Not in the slightest," which was a lie. When Gawker broke the news yesterday that Poling and Liebergall were Dodd donors, his press secretary sent an e-mail complaining that the exemption had been added in during a conference to reconcile the House and Senate bills and that Dodd had "insisted that the final version include a provision to require the Treasury Department to review past bonuses," but that the "provision was removed from the stimulus bill in Conference." It was an artful use of the passive voice, but we fell for it and changed the item accordingly.
In truth, Dodd knowingly agreed to modify the his amendment in favor of the AIG bonuses at the request of the White House, which he admitted to CNN yesterday.
It's clear that Dodd lied earlier this week because he had not yet coordinated with the White House on how to deal with the bonus mess. The notion that Dodd was responsible was first floated in a Saturday New York Times story by an anonymous Treasury official; when he was caught by the CNN producer on Tuesday, he was likely not prepared to blast back and blame the White House for making him carry their water and add the AIG exemption, so he simply denied it. But by yesterday, he was becoming identified as a protector of AIG, so he fought back and told the truth, too late. If he'd been honest from the beginning, the fact that he reluctantly rolled over for the White House would be far less damaging than having to dramatically reverse himself on national television.
The result is a mess. Dodd is up for re-election next year, and his homestate papers have sharply critical stories this morning on the about-face. Former congressman Rob Simmons announced on Sunday that he would challenge Dodd in 2010, and a recent Quinnipiac poll shows Simmons winning 43 percent to 42 percent, which is not a good place for a four-term senator to be.
Dodd's apparent strategy is contrition: He apologized to Blitzer over any "confusion" he may have caused with his lie. And he also announced his intention to return all donations from AIG executives. It may work, but because of his own mendacity, this episode has strengthened a growing reputation as a well-rewarded shill for the banks and mortgage lenders that ruined the country. He was regarded as a "special customer" of Countrywide Financial by CEO Angelo Mozilo, and received a sweetheart interest rate on his home mortgage. Dodd says he was unaware that he got special treatment, but how do you know whether to believe him?
Here's Dodd's full statement on the mess.