Don’t be fooled by reports that Obama just learned of the AIG bonuses or the stimulus bill clauses that enable them. His response to Jay Leno, that he was “shocked” to learn of the bonuses was simply feigned emotion.
http://www.butasforme.com/2009/03/17/obamas-stimulus-bill-explicitly-grants-aig-the-legal-right-to-hand-out-bonuses/
First, These bonuses were widely reported in January.
Second, The New York Times reported in February that the White House Wanted to Revise Parts of the Stimulus Dealing with Executive Compensation.
Facing a stricter approach to limiting executive bonuses than it had favored, the Obama administration wants to revise that part of the stimulus package even after it becomes law, White House officials said Sunday…. President Obama plans to sign the $787 billion stimulus bill on Tuesday, but his administration will seek changes in the government’s approach to executive compensation, a senior Obama adviser, David Axelrod, said…. Mr. Obama’s press secretary, Robert Gibbs, appearing on “Face the Nation” on CBS, also said the administration would seek to “strike the right balance” on compensation. Asked if Mr. Obama would enforce the bill and was satisfied with it, Mr. Gibbs replied, “We will sign this bill into law on Tuesday.”
Obama wanted to make the executive compensation rules lax:
Under the administration’s proposal, compensation restrictions would apply only to banks that received “exceptional assistance” from the government.
Two top lawmakers on committees that oversee financial regulations appeared to dismiss the possibility that the administration would not follow the compensation requirements. “Mr. Gibbs may not like it, but it is going to be enforced,” Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, said on CBS. “This is not an option. This is not, frankly, the Bush administration, where they’re going to issue a signing statement and refuse to enforce it.”
In March, according to the WSJ, Obama issued signing statements — although it is not clear if these signing statements directly affect executive compensation due to the broad nature of the relevant statements issued by Obama.
Third, Obama’s Treasury Secretary, Geithner, at a March 3rd Ways and Means hearing responded to a question about the AIG bonuses to be paid for in weeks. This hearing came one week before Secretary Geithner says that he knew about the bonuses and testifies the President laid out provisions for bonuses.
http://www.butasforme.com/2009/03/17/obamas-stimulus-bill-explicitly-grants-aig-the-legal-right-to-hand-out-bonuses/
INCOMPETENT or LIES: To have the executive compensation section of the bill so adamantly discussed by this administration, without thought to AIG Bonuses, the single biggest beneficiary of all bailout funds renders this administration grossly incompetent. The other explanation is that he is now lying to save face. You decide.
Remember, Obama wants to encourage anger at AIG because it takes the attention away from the gross incompetence of government. The government is charged with the responsibility to protect taxpayer money, not AIG. The mere fact Obama enabled this mess puts him at the root of this problem. But the Obama administration understands that if public discourse is centered on greedy companies–it takes attention away from his responsibility.
From CNN: But though some lawmakers did move to prevent bonuses in the stimulus bill last month, the final language actually makes an exception for pre-existing contracts, effectively exempting AIG.
HIGH IMPACT - Thanks to our stimulus spending bill search engine, we discovered that Obama granted AIG a free legal pass to give high bonuses because of the following stipulation in Obama’s stimulus bill he personally orchestrated and signed into law.
From page H1412 of the Final Stimulus Bill, “SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE:
“(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a writte [sic] employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.”
This amendment provides an exception for contractually obligated bonuses agreed on before Feb. 11, 2009, which exempts the very AIG bonuses Obama is condemning every single chance he gets. The amendment is in the final version and is law.
Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org — According to the Wall Street Journal, Sen. Dodd placed this section into the final stimulus bill, making him responsible, along with Obama, for AIG receiving these bonuses.
The stimulus bill should have nothing to do with executive compensation. However, woven within the stimulus bill are laws deal