Despite President Obama’s loudly expressed outrage over the AIG bonuses, it turns out that he knew about them already, reports the Washington Post:
President Obama was informed about the $165 million in bonuses due to employees of the American Insurance Group the day before they were paid out last week, the White House disclosed late Tuesday.
Obama has expressed outrage that the company, which has received about $170 billion in government bailout money, proceeded to pay out the bonuses. He said the idea of a company rescued with taxpayer money awarding bonuses runs counter to “our values.”
The timeline released Tuesday marked the first time the White House has acknowledged when the president was told about the bonuses, which have prompted calls from Congress for the administration to recover the money. . .
The president did not publicly express anger over the bonuses until after they were disclosed Sunday in The Washington Post.
(Emphasis mine.) (Via Hot Air.)
So the bonuses were no big deal, as long as no one knew about them. It wasn’t until they became public that Obama needed to get in front of the issue.
In fact, not only was Obama okay with the bonuses until Monday, it seems that he was instrumental for making them happen. The stimulus bill actually explicitly protects the bonuses:
(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written 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.”
When asked about the bonuses, Harry Reid said “hindsight is 20/20.” But, in fact, the Senate had the foresight to prohibit them in its original bill. That provision was deleted in conference, and replaced with the provision protecting the bonuses, CNN reports:
The mystery isn’t just how what was effectively a protection for AIG was put into the stimulus bill — it’s also how a provision intended to prevent AIG from giving executive bonuses, was taken out.
The Senate passed a bipartisan amendment proposed by Sen. Olympia Snowe, R- Maine, and Sen. Ron Wyden, D-Oregon, that would have taxed bonuses on any company getting federal bailout dollars, if the company didn’t pay back the bonus money to the government.
But the idea was stripped from the stimulus bill during hurried, closed-door negotiations with the White House and House of Representatives.
So, who did it? Blame had been centering on Christopher Dodd (D-CT), the chair of the Senate banking committee, who reportedly added the provision. But Dodd says it wasn’t his fault, it was the Treasury Department. The New York Times reports:
Mr. Geithner reiterated the Treasury position that lawyers inside and out of government had agreed that “it would be legally difficult to prevent these contractually mandated payments.”
That position was being questioned at the Capitol. Congressional Republicans, eager to implicate Democrats, initially blamed Senator Christopher J. Dodd, the Connecticut Democrat who heads the banking committee, for adding to the economic recovery package an amendment that cracked down on bonuses at companies getting bailout money, but that exempted bonuses protected by contracts, like A.I.G.’s.
Mr. Dodd, in turn, responded Tuesday with a statement saying that the exemption actually had been inserted at the insistence of Treasury during Congress’s final legislative negotiations.
(Emphasis mine.) (Via the Corner.)
So if Dodd is to be believed (a big if), the Obama Administration actually insisted on the bonuses it is now condemning. If Dodd is lying, the President Obama still negotiated the bill and signed it. Either way, this is Obama’s baby.
UPDATE: Actually, Dodd originally said he wasn’t involved in the provision “in the slightest.” Now he says Treasury insisted on it. Either way, Dodd lied. So I should have said: if Dodd is to be believed now. . .
UPDATE: Time reports:
Treasury Learned of AIG Bonuses Earlier Than Claimed
Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG’s impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is 10 days before Treasury staffers say they first learned “full details” of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.
(Via the Corner.)
Phony outrage indeed.