The NY Times is reporting (paragraph 16) that Chris Dodd included an exemption for bonuses like the ones given AIG in the February stimulus bill …
I thought about adding this to Steve’s post on the Democrats going after Rob Simmons but this story is becoming bigger by the minute.
The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place.
Note, that’s the Obama administration throwing Dodd under the bus. This is not going to help Dodd’s sinking poll numbers which, as even the Wall Street Journal now notes, has made Dodd as target …
Already, a growing anti-industry backlash presages a tough re-election fight for Mr. Dodd next year — a remarkable development given his popularity in a solidly Democratic state. Former Rep. Rob Simmons (R., Conn.) on Monday said he would challenge the senator in 2010, proclaiming in an interview that “it’s time for a change.”
With polls showing the men almost tied, there are signs Mr. Dodd may be staking out a newly populist stance, pushing for limits on executive pay over the objections of the White House and rattling markets by musing about nationalizing banks.
Interesting stance on Dodd’s part, populism, given his willingness to veto restrictions on Fannie Mae in 2005, his noted bonus exemption provision in the stimulus bill, and then there’s this ..
But the Countrywide controversy has come at a bad time. It emerged in June that Mr. Dodd, who received two mortgages from the firm, was in a special program for “friends” of Chief Executive Angelo Mozilo. Mr. Dodd said he didn’t seek, nor was he aware of, receiving any special rates or terms.
Mr. Dodd has always had good relations with financial firms — and that could be a liability in the current climate. In the past six years, he has raised $1.5 million from the securities industry, third most among senators. The industry also gave $2.7 million to his presidential campaign.
Then there’s the LA Times chiming in … and it ain’t good.
Now, of course, he finds himself in the red-hot center of the country’s banking collapse. He may be able to take credit if Congress passes new, tougher banking regulations, but, asNaftali Bendavid of the Wall Street Journal reports, the public mood toward bankers and their buddies is sour: “He also is a longtime friend of Wall Street, making him a convenient scapegoat if voters sour on the government’s handling of the economic crisis.”
Even Fox Business has jumped on the story.
Update: Here’s an excerpt from their story over at Fox Business:
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” — which exempts the very AIG bonuses Dodd and others are now seeking to tax.
“Senator Dodd’s original executive compensation amendment adopted by the Senate did not include an exemption for existing contracts that provided for these types of bonuses,” wrote Dodd Spokesperson Kate Szostak in a response to FOX Business. “Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made,” she said, without suggesting who made the change.
The provision excluding those bonus payments made it into the final version of the bill, and is law
Read the whole thing. And make sure you read Steve’s post …. Dodd’s got some big problems and George Bush won’t get him out of this one.