TPM News

Washington can have a woefully short memory. But Sens. Ron Wyden (D-OR) and Olympia Snowe (R-ME) remember what TPMDC reported on just last month: their proposal to force bailed-out companies to rescind executive bonuses could have made it into the stimulus bill, but was stripped out by Democratic leaders at the last minute.

Wyden and Snowe are now asking Treasury Secretary Tim Geithner to support their bailout bonuses measure, which could have prevented much of the current AIG flap and was scored as a money-maker for the U.S. government.

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Here's a point that's worth remembering amid the furor over those AIG bonuses: law enforcement agencies on both sides of the Atlantic have begun investigations into the company in recent months -- and those probes appear to be ongoing.

Last September, when the financial crisis began in earnest, following the collapse of Lehman Brothers, several news outlets reported (via Nexis) that the FBI had launched an investigation into potential fraud at four of the firms at the center of the collapse: Lehman, Fannie Mae, Freddie Mac ... and AIG. Subsequent reports have suggested that the AIG piece is focused on the financial products unit (AIGFP), where the losses that led to the firm's collapse mostly occurred.

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The Family Research Council (FRC) and Concerned Women of America (CWA): You know them well as some of the most vocal right-wing groups in the nation, the types that push against President Obama's agenda as hard as they can, from his nominees to his executive orders.

And guess where the two groups are headed today ... to the White House, to meet with Obama's director of faith-based initiatives about finding common ground on religious-related issues.

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It seems there's no end to the frustration on Capitol Hill over the behavior of bailed-out banks. On a day when AIG remained the No. 1 target of populist wrath from both parties, 43 House Democrats dashed off a letter to JP Morgan Chase CEO Jamie Dimon, blasting the bank's plan to spend $400 million on expanding its Indian IT workforce.

The letter, spearheaded by Rep. Mary Jo Kilroy (D-OH), whose state has 15,000 JP Morgan Chase employees, can be found after the jump, along with the names of co-signers (including Financial Services Committee Chairman Barney Frank [D-MA]).

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We're learning a bit more about the breakdown of those AIG bonuses -- thanks to New York Attorney General Andrew Cuomo.

In a letter sent to House Financial Services chair Barney Frank, Cuomo, who is probing the awards, wrote that seventy-three members of AIG's financial products unit were paid more than $1 million each.

And get this: Though the payments were called "retention" bonuses, 11 of those 73 millionaires, including one who got $4.6 million, are no longer even at AIG.

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House Financial Services Committee Chairman Barney Frank (D-MA) just finished a press conference on AIG, where he divulged a new wrinkle in the ongoing push to recoup the company's lavish bonuses.

The U.S. government apparently added "covenants" to its deal with AIG to cede some of its rights as the majority owner of the company, Frank said, adding in plain English: "It's time to act as the owner."

Frank declined to elaborate further on the nature of the limits that were set "restraining [the government's] influence" over AIG, but he said he'd be taking the issue up further with the Obama administration later today.

And he reminded reporters that Congress had no control over the AIG bailout, which was conducted via the Federal Reserve rather than the legislation that set up the TARP program late last year. "Remember, the legislative authority for this is essentially the 1932 statute" that set the Fed's lending rules, Frank said.

Asked about the idea picking up steam in the Senate as well as the Joint Economic Committee to tax AIG's bonuses as 100%, Frank demurred to Rep. Charles Rangel's (D-NY) Ways and Means Committee, which has broad jurisdiction over taxation.

Late Update: Here's the video of Frank's comments today.

So we know that it was AIG's financial products unit that engaged in those disastrous credit default swaps that helped bring the company to its knees last fall. And it's staff from that same unit that the firm just paid bonuses to last week, setting off a tidal wave of fury across the country.

That unit, based in London and Connecticut, was led until last year by Joseph Cassano, who negotiated a $1 million-a-month retainer when he left (AIG says it has since terminated that arrangement).

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Minnesota Democratic spokesman Eric Fought gave TPM this statement, in response to the repeated invocation of Bush v. Gore by Senate Republicans regarding the Minnesota Senate race:

"Minnesota isn't Florida. Minnesota has a long and proud tradition of conducting meticulously fair elections and has rightfully earned a reputation of having one of the best election systems in the country. Attacking the hard-working men and women who conduct our elections does nothing but show the desperation these Washington insiders are experiencing.

"It's very telling that Republicans are talking about appeals before this case has been decided. They know what Minnesotans know -- that Al Franken received the most votes on Election Day. And while Norm Coleman and his friends in Washington may want to drag this out for as long as possible, Senator-elect Franken is prepared to get to work for the people of Minnesota."

A new poll for NPR, conducted jointly by GOP firm Public Opinion Strategies and Democratic firm Greenberg Quinlan Rosner, finds a clear majority of Americans preferring Democratic positions over the Republican ones on the various issues surrounding the federal budget.

The poll presented likely voters with a statement of what Republicans will say about budget issues pertaining to taxes, health care, energy and the deficit, rotated with Democratic statements about those same topics. The Dem positions were ahead 52%-43% on taxes, 53%-42% on energy, 53%-42% on health care, and 51%-45% on the deficit.

And when respondents were asked whether they favored President Obama's plans on the budget, it was 50% approval to 41% opposition.

But it's still a center-right country, right?

As a member of the House Financial Services Committee, Rep. Brad Miller (D-NC) has had a front-row seat for the fireworks over the financial bailout -- and he's not convinced that the new administration has changed the Treasury Department.

"I want change I can believe in," he told me in an interview late yesterday. "I don't think I have change I can notice."

Miller's chagrin over Treasury's lack of responsiveness and transparency signals a distressing trend for the Obama administration. As the nation seethes with anger over lavish spending at bailed-out banks -- particularly AIG's $450 million in bonuses to the same executives who bankrupted the company -- a number of lawmakers from both parties are pointing out that Treasury Secretary Tim Geithner's team could have clamped down on the excess earlier.

And Miller is no gadfly; he has worked with colleagues on predatory lending and mortgage bankruptcy measures that have become top-tier priorities thanks to the financial crisis. He was candid in calling out Geithner for failing to fully inform Congress about his management of the bailout: "I don't feel a lot of confidence in all of this, because I don't have much idea what they're doing ... I'm a fairly conscientious member of the Financial Services Committee, and I haven't found out."

One thing Miller is sure of is that Goldman Sachs, the alma mater of Bush Treasury Secretary Hank Paulson, "had a lot of influence over" the decision to rescue AIG's counterparties (among which Goldman was No. 1).

"I don't want to sound like a right-wing conspiracy theorist who thinks the Trilateral Commission controls the world, but it seems [Goldman] had a lot of influence over this," he said, citing the Obama administration's decision to waive ethics rules to bring in a former Goldman lobbyist as Geithner's chief aide.

Miller was particularly aghast at AIG's suggestion that its Financial Products employees would sue if they were denied their retention bonus payments. "I've been wracking my brain thinking of ways we can sue them," he quipped.

Miller's not alone. After the jump, you can read more skeptical reaction to the Obama administration's sudden -- and likely ineffective -- change of heart on AIG's bonuses.

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