I’m not a big fan of Shepard Smith, but he speaks the truth passionately here about how the AIG bonus debacle went down. It’s very educational. And by the way, when he says Congress did this, he means the Democrats. You can’t claim the stimulus, which contained Chris Dodd’s amendment that allowed the bonuses to go through, was a bipartisan effort when only three Republicans out of two houses of Congress voted for the thing. Thanks to Johnny Dollar for the video:
Update: Dodd admits the amendment was his. But he’s passing the buck to Treasury:
According to Dodd, officials at Treasury expressed concern that if the government were to prohibit payouts, it risked being sued by companies like AIG, which had contracts stipulating that bonuses were to be paid.
Update II: CNN has more on Dodd admitting to the AIG bonus loophole:
Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he added language to the federal stimulus bill to make sure contracts for bonuses at companies receiving federal bailout money stayed in place.
Dodd told CNN’s Dana Bash and Wolf Blitzer that Obama administration officials wanted the language added to an amendment limiting bonuses that could be paid by those companies. He said they were afraid that without it, the government would face numerous lawsuits.
On Tuesday, Dodd denied to CNN that he had anything to do with adding the language, which has been used by officials at AIG to justify paying millions of dollars in bonuses to executives after receiving federal money.