AIG Bonus Payments? I’m Shocked, Shocked!!!

Like Captain Louis Renault, the police prefect of Casablanca, who was “…shocked, shocked to find that gambling is going on in here!”,  Senator Chris Dodd (D-Conn) seemed to be completely in the dark as to how top management of AIG got over $160 million in bonuses.

In a statementreleased by his office, Sen. Dodd said “This is another outrageous example of executives – including those whose decisions were responsible for the problems that caused AIG’s collapse – enriching themselves at the expense of taxpayers.  A car mechanic or teacher in Connecticut shouldn’t have to subsidize the bad decisions of these executives. Executives at other companies receiving TARP funds have voluntarily foregone bonuses – there’s no reason why those at AIG shouldn’t do the same.” 

That’s interesting. While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009”  exempting the very AIG bonuses Dodd and others are now seeking to tax. 

[Tidbit: Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.]

“Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made,” Dodd Spokesperson Kate Szostak said in a response to FOX Business.  “Senator Dodd was completely unaware of these AIG bonuses until he learned of them in the past few days,” wrote Szostak.  To suggest that the bonuses affecting AIG had any effect on Senator Dodd’s action is categorically false.”