Who in the Obama Administration pushed to weaken a key anti-bonus provision in the stimulus bill last month? Sen. Chris Dodd, who wrote the provision — and ultimately agreed to defang it — isn’t saying.
Ever since the AIG story broke, we’ve heard about the company’s binding contracts as a key barrier to the government blocking bonuses to AIG executives.
It turns out that a provision in the stimulus, which passed in February, prohibits the government from blocking any bonuses that were part of contracts agreed to before February 11. That provision has taken on new relevance this week because it would complicate any government effort to claw back the AIG bonuses.
Dodd’s original anti-bonus language would have been retroactive for firms — like AIG — that are recipients of TARP money. The senator told CNN this afternoon that he agreed to make the modification because the Administration “had problems” with the amendment. And a Treasury official confirmed that the language was modified after the department voiced concerns, Dana Bash reported.
But when Wolf Blitzer pressed Dodd on who exactly asked him to change the provision, the senator made a reference to “staff level” talks and declined to answer the question. Here’s that exchange:
BLITZER: What I hear you saying is that, you personally, you did this in order — at the request of officials at the Treasury Department, Timothy Geithner, among others.
DODD: Well, I didn’t say who it was. But just say this, I wouldn’t have modified my own amendment at my own insistence. I mean, I spent a long time to having people try to be — change it. And obviously they came. And the alternative was losing the amendment. And I didn’t think we should do that at all.
BLITZER: Who asked you at the Treasury Department to do it?
DODD: Well, they were people, obviously, coming and negotiating with the staffs back and forth. And I don’t know their names specifically, it was at a staff level, people were talking about it.
BLITZER: So it — but it wasn’t just your members of your own staff at the Senate Banking Committee who did this, you personally knew about it at the time, is that right?
DODD: No, I didn’t know the exact details. I knew they were coming with modifications to it, and whether or not we’d accept some.
The anti-bonus provision has been the subject of several posts in the liberal blogosphere today, after an anonymous administration official was quoted in the New York Times Sunday appearing to place the blame on Dodd for the weakening of the language.
Jane Hamsher cites two contemporaneous articles on the stimulus that identify top administration opposing Dodd’s original, tougher language. This one from the Wall Street Journal reports that Timothy Geithner and Lawrence Summers “had called Sen. Dodd and asked him to reconsider.”
And this one, from The Hill, says President Obama himself wanted changes in the provision.
If those reports — both anonymously sourced — are accurate, contacts with Dodd occurred well above the “staff level.” Something tells us we’ll be hearing more about this.
Late Update: Here’s the video of Dodd’s exchange with Blitzer.
