AIG- sensing the trap and the coming PR mess, asks lawyers to review the plan and tell them whether to pay the bonuses or back off. Lawyers tell them they are contractually obligated to pay the bonuses and risk being sued and thus paying punitive damages in addition to the bonuses.
Don't get me wrong. I think failing businesses should be allowed to fail. I am no fan of bail-outs for business or private individuals. But this whole thing stinks.
From Campaign Spot:
Who in their right mind would codify in law that bonus payments to executives at bailed-out companies could not be prohibited?
Well, Chris Dodd.
From page H1412 of the Final Stimulus Bill, “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.” This amendment provides an exception for contractually obligated bonuses agreed on before Feb. 11, 2009, which exempts the very AIG bonuses Obama is condemning every single chance he gets. The amendment is in the final version and is law.
Of course the money that AIG paid to Obam and Dodd had nothing to do with it I'm sure...
Mr. Dodd, who is facing a tough re-election campaign in 2010, was the largest beneficiary of campaign cash in the 2008 election cycle. Mr. Dodd received $103,000 from AIG, while Mr. Obama came in a close second at $101,332. (the bulletin)
And the lies continue:
The Wall Street Journal reports Obama "knew he had little power to stop AIG from issuing the bonuses, even as he stood before television cameras and vowed Monday to 'block these bonuses,' White House officials said," and "by the end of the day, the White House acknowledged its limited options."
The AP says, "So far, the administration has been unable to match its actions to Obama's tough rhetoric on executive compensation."
The Washington Post reports on its front page, "Senior White House officials said last night that...Obama did not learn" about the impending bonuses "until Thursday, one day before they were issued and two days after" Treasury Secretary Geithner "was informed that the payments were going forward." (US News)
The US News article is particularly telling. Since the bonuses were part of the Asministrations plan they either are lieing or in way over their heads and can't keep up with the substance of thier own bills. I figure its both..