Brown: AIG Bonus Payments Are Slap-In-the-Face to Hardworking OhioansYep...the same Senator that was shuttled back to Washington D.C. by Obama on a White House provided plane to cast the deciding vote on the
March 17, 2009
WASHINGTON, D.C. –U.S. Sen. Sherrod Brown (D-OH), Chairman of the Senate Banking Subcommittee on Economic Policy, today called on American International Group (AIG) Chairman and CEO Edward Liddy to immediately renegotiate contacts to prevent $165 million in bonus payments to AIG executives.
“AIG’s actions are a slap-in-the-face to hardworking Ohio families,” said Brown. “Bonuses at companies like AIG—companies relying on taxpayer funds to stay afloat—are an outrage. I hope AIG executives voluntarily return these bonuses. If they don’t, I will push to have them recouped through the U.S. tax code.”...
What's that you ask?...What does the Stimulus Bill have to do with the AIG "slap-in-the-face" bonus payments? It was Brown's vote that put into law the provision guaranteeing the payments (HT: ButAsForMe) (emphasis added):
`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 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...
Update: Via CNN:
Bonuses allowed by stimulus billUpdate 2: The 'I was against it, before I was for it' hits just keep on coming.
WASHINGTON (CNN) -- Democratic leaders scrambling to strip AIG executives of bonuses are having a hard time answering a key question: Why didn't Congress act to prevent the bonuses in the first place?
There's always more we can do, and hindsight is 20/20," said Senate Majority Leader Harry Reid Tuesday.
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.
Senate Banking Committee Chairman Chris Dodd, D-Connecticut, who originally proposed the executive compensation provision, said he did not include the exemption clause, which said new rules "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."
In an interview with CNN, Dodd denied inserting that exemption at the 11th hour, and insisted he doesn't know how it got there.
"When I wrote the language there was no such language like that," Dodd told CNN Tuesday.
Multiple Senate Democratic leadership sources also deny knowing how the exemption got into the bill.
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.
Senate Finance Committee Chairman Max Baucus, D-Montana, who is now pursing a similar bonus tax idea in the wake of outrage over AIG, said it was a mistake to drop it from the stimulus bill. He made a stunning admission. Watch why Americans are angry »
"Frankly it was such a rush -- we're talking about the stimulus bill now -- to get it passed, I didn't have time and other conferees didn't have time to address many of the provisions that were modified significantly," said Baucus.
"We shouldn't be here. That should have passed, but it didn't," he said.
Snowe chastised colleagues for expressing outrage about AIG's bonuses, when just last month they did away with her amendment intended to prevent it.
"We tried. It simply didn't happen, and that's a tragedy, given what's happened today," Snowe told CNN in an interview.
Majority Leader Reid would not directly answer a question from CNN about whether that was a mistake.
"Outrage" from Republican Senator Snowe, who also voted for H.R.1:
Snowe Expresses Outrage over AIG Bonuses and UBS Tax Crimes
March 17, 2009
Washington, D.C. -
At today’s Senate Finance Committee hearing examining Ponzi schemes and other egregious tax evasions, U.S. Senator Olympia J. Snowe (R-Maine) today voiced outrage over the extreme violation of public trust committed by American International Group (AIG) for doling out $165 million in bonuses after receiving a $170 billion bailout from the federal government.
"These bonuses are a staggering insult to the American people," Senator Snowe said. "Clearly these executives need a strong and resounding reality check."
Referring to her amendment with Senator Ron Wyden (D-Ore.) that would have forced financial institutions receiving TARP money to repay bonuses over $100,000 or face a 35 percent excise tax on what is not immediately repaid to the treasury, Senator Snowe commented that if the provision had not been stripped out of the final stimulus package, the American people could reclaim these obscene bonuses.
"The stimulus debate presented an opportunity to enact firm restrictions on the ability of financial institutions receiving TARP funds to provide executive compensation," Snowe continued. "The Snowe-Wyden amendment would have forced AIG to either return the TARP money or pay out the bonuses and incur a 35 percent tax – equating to roughly $58 million. Yet my provision with Senator Wyden was inexplicably stripped out of the final package - leaving us with the unacceptable outcome we face today."...