Tim Geithner says he take “full responsibility” for knowing the stimulus legislation had a loophole that would allow bailed-out insurance giant American International Group pay massive bonuses to employees at the controversial money-losing financial products group.
In an interview with CNN’s Ali Velshi, Geithner said the Treasury Department did talk to Sen. Chris Dodd about a clause he put forth that would have strictly limited executive bonuses.
The Treasury Department was concerned that legislation that would restrict contractual bonuses would not hold up to legal challenges, Geithner said.
“We expressed concern about this specific version. We wanted to make sure it was strong enough to survive legal challenge,” Geithner said.
Geithner’s interview will air on CNN in part at 5 p.m. ET on Thursday and in full at 8 p.m.
Dodd, chairman of the Senate Banking Committee, also acknowledged Wednesday his role in controversy, after denying having anything to do with crafting language that permitted the bonuses.
Geithner said he learned the full scale of the bonus problems on March 10.
“It’s my responsibility, I was in a position where I didn’t know about those sooner, I take full responsibility for that,” he said.
Geithner probably hopes that by taking responsibility in this way, he can defuse criticism. As CNN’s senior political correspondent said about Barack Obama, when these guys say “blame me” it is political code for “move on.” It is, in other words, an attempt to change subjects and end discussion.