We feel pretty confident that our initial defence of Sen. Dodd is well founded. By various accounts, it appears that Dodd initially wanted the bonus limitations in the Stimulus deal, but that it was Obama and the Treasury Department that fought heavily for the clause that prevents the recoupment of the AIG bonuses.
Now we’re not necessarily against the clause, which made it so that bonus limitations shouldn’t be retroactive. Retroactive limitations are problematic. But it seems that the smears on Dodd may be coming from Treasury as well.
Glenn Greenwald at Salon has a full narrative, and the official word out of Dod’s office:
It was Obama officials, not Dodd, who demanded that already-vested bonus payments be exempted. And it was Dodd, not Obama officials, who wanted the prohibition applied to all compensation agreements, past and future. The provision which shielded already-promised bonus payments from the executive compensation limits ended up being inserted at the insistence of Geithner. A spokesperson for Dodd, who is now consumed by these completely unfair attacks, finally confirmed today that these provisions were inserted at the direction of Treasury officials:
Senator Dodd’s original executive compensation amendment adopted by the Senate did not include an exemption for existing contracts that provided for these types of bonuses. Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made, including adding the exemption, to ensure that some bonus restrictions would be included in the final stimulus bill.
So why is Sen. Dodd taking flack that should rightfully be heaped on Geithner?
As suggested by a blogger at Firedoglake, Geithner ought to testify on AIG, since he knows more about it than anyone else. But beyond that, it’s clear that his reputation is severely damaged. AIG is just one of many issues dogging him, including, of course, his unsteady handling of the banking fix.
Before he was approved by the Senate, we came to the conclusion that his mini tax scandal gave a glimpse into Geithner’s character and should’ve been taken seriously. That’s been pretty well vindicated now.