Don't blame Dodd

By Michael J.W. Stickings

Another must-read, an extremely important one, from Greenwald:

There is a major push underway -- engineered by Obama's Treasury officials, enabled by a mindless media, and amplified by the right-wing press -- to blame Chris Dodd for the AIG bonus payments. That would be perfectly fine if it were true. But it's completely false, and the scheme to heap the blame on him for the AIG bonus payments is based on demonstrable falsehoods.

Jane Hamsher has written the definitive post narrating and indisputably documenting what actually took place. The attempt to blame Dodd is based on a patently false claim that was first fed to The New York Times on Saturday by an "administration official" granted anonymity by Times reporters Edmund Andrew and Peter Baker (in violation, as usual, of the NYT anonymity policy, since all the official was doing was disseminating pro-administration spin). The accusation against Dodd is that there is nothing the Obama administration can do about the AIG bonus payments because Dodd inserted a clause into the stimulus bill which exempted executive compensation agreements entered into before February, 2009 from the compensation limits imposed on firms receiving bailout funds. Thus, this accusation asserts, it was Dodd's amendment which explicitly allowed firms like AIG to make bonus payments that were promised before the stimulus bill was enacted.

That is simply not what happened. What actually happened is the opposite. It was Dodd who did everything possible -- including writing and advocating for an amendment -- which would have applied the limitations on executive compensation to all bailout-receiving firms, including AIG, and applied it to all future bonus payments without regard to when those payments were promised. But it was Tim Geithner and Larry Summers who openly criticized Dodd's proposal at the time and insisted that those limitations should apply only to future compensation contracts, not ones that already existed. The exemption for already existing compensation agreements -- the exact provision that is now protecting the AIG bonus payments -- was inserted at the White House's insistence and over Dodd's objections. But now that a political scandal has erupted over these payments, the White House is trying to deflect blame from itself and heap it all on Chris Dodd by claiming that it was Dodd who was responsible for that exemption.

In this case, I fear, the Obama Administration has no one to blame but itself.

For more on the appalling AIG bonuses, see Steve Benen and, on Geithner and Summers, Chris Bowers. It's linked above, but make sure to read Jane Hamsher's brilliant post.

(Note that the right -- notably, Fox Business -- has picked up on the anti-Dodd smear, as Glenn mentions.)