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March 20th, 2009
11:51 AM ET

Who wrote the AIG bonus loophole? An easy question that Washington can't seem to answer.

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Drew Griffin
CNN Special Investigations Unit

OK – In this new age of "transparency" I want to know who in Congress, White House or the Treasury Department wrote this!

(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 is the loophole written into the American Recovery and Reinvestment Act of 2009 (the stimulus whopper) that "congressionally blesses" the very AIG bonuses congress itself is now blasting.

It was a simple question we began asking Tuesday. But there is no easy answer so far.

Sen. Chris Dodd, D-CT, accepted some responsibility, sort of. He says the administration suggested he put the language in the bill.

But Treasury chief Tim Geithner told our Ali Velshi, while some suggestions were made between "staffs" no language was drafted by treasury., Sen. Dodd has been dancing ever since, and may again try to clear the air with a news conference today.

The most recent explanation being spun in Washington is that it would have been illegal for Congress to retroactively go back and deny bonuses on contracts already signed and sealed. That may be true, but since when does Congress worry about such trivial matters as retroactive law-making? After all, the only challenge would be from an AIG executive who would have to take his or her case to court, thereby revealing they not only are receiving a taxpayer-funded bonus but would stand in open court saying they deserve a taxpayer-funded bonus.

All I want to know is who wrote the loophole. And so far, like a group of baseball playing kids standing in front of a broken window, Congress, Treasury and the White House are all saying "not me."

Very transparent.


Filed under: AIG • Drew Griffin • Keeping Them Honest
soundoff (11 Responses)
  1. Jo Ann

    Drew,

    I have been asking that same question for quite awhile.

    Let’s be honest here, Obama has a habit of being able to avoid taking responsibility for anything and for throwing other people under the bus in order to do so and Congress is following his lead. When I hear these guys talking about this issue I have to remind myself that Bush is no longer in office because it sounds like “business as usual.” Obama also knows that he can call on the media to defend him.

    The Democrats will probably get those inclined to do so to believe that this was all an oversight and not the deliberate action that those of us with common sense know that it was.

    The political “connections” between AIG, Obama, Dodd and others in Congress are more than a coincidence.

    I realize this is not a huge amount of money in the larger scheme of things, but what it says about those involved speaks volumes.

    If anyone can find out who wrote this loophole I know you can.

    This administration is getting less transparent as we speak. . .

    Jo Ann
    North Royalton, Ohio

    March 20, 2009 at 7:11 pm |
  2. Lisa in CA

    Can we just fire Congress? They all approved the bill, and as such all bear responsibility regardless of who wrote it. If they failed to read the bill - or their staff failed to brief them properly, then get rid of them. We demand that people take responsibility for their actions, yet our own government refuses to do just that.

    Why would any company, okay, the shareholders anyway, want to retain employees who drive their companies to insolvency? Why weren't there provisions in the original AIG contracts that would allow the bonuses only in the event of success - not failure. Do we really not have that common sense?

    But back to Congress - they live in their ivory towers on the Beltway, having no clue what is really going on between the coasts. Trying calling your Senator or Representative. You'll get voicemail to leave your comment. We, the people they represent, are not important enough to talk to a live voice. However, those large donors certainly are. And the language in this bill reflects just that - the large donors are happy, and we the people get screwed yet once again.

    March 20, 2009 at 3:28 pm |
  3. mary Frost

    I agree with the email written by Drew Griffin-CNN correspondent, I'd like to know who wrote the first email on this topic–check first email above. With the "SO-CALLED TRANSPARENCY" in this administration, surely outraged President Obama will want to KNOW THE ANSWER. YOU-IN THE MEDIA–ask him.

    March 20, 2009 at 1:22 pm |
  4. Jeanette

    They should really get to the bottom of this and demand an explanation. If Sen Dodd was told this as he has been claiming the last few days. We need to know by WHO. Also, I would really like to know if this came from our president!! He says it was a staff member. We need to be told the truth about this or it will never go away.

    jeanette-show me state–(same as tell me)

    March 20, 2009 at 1:22 pm |
  5. Erik

    I am sure that there are many people who are unemployed or about to lose their home to foreclosure who would be able to utilize this money to save them from the existing crisis they are experiencing that these people created and regardless of who wrote the language into the bill it should be repealed immediately and without further ado....And some one needs to address the larger issues like making sure that every move these people make is closely followed and scrutinized to determine how to improve this institution into a fail safe one.

    March 20, 2009 at 1:04 pm |
  6. Dawn

    Well that makes sense! If there was already an employment contract and ppl were expecting bonuses you can't take that away from them! Jeez. I know that my company just announced that it's US division would not be giving merit increases this year and I'd be very angry if that happens to us in Canada. Especially when it's 2 weeks BEFORE the date that the merit increases are usually announced! LAME. So same thing with a bonus, people count on this income and deserve it for their hard work, so you can't just take it away, how is that helping the economy?!

    March 20, 2009 at 12:57 pm |
  7. Melissa

    Noooo..... what Dodd says is that higher ups were insisting it be added so he wrote it into the bill. Geithner said he ordered it. Haven't you been reading/watching the news?

    March 20, 2009 at 12:43 pm |
  8. Cindy

    Drew,
    You know that they'll keep hem hawing around the bush and we will never get a straight answer out of any of them. The real deal is that it came straight from the top I bet, nothing like a little back scratching if you know what I mean, that's why they don't want to tell the truth.

    Cindy..Ga.

    March 20, 2009 at 12:33 pm |
  9. Teresa

    re: "Sen. Chris Dodd, D-CT, accepted some responsibility, sort of."
    I was pregnant twice, SORT OF.

    Who does Dodd say the "administration" is who suggested the language?

    I'm thinking he is part of the congress "hood" that doesnt believe in snitching. lol

    March 20, 2009 at 12:26 pm |
  10. Larry C.

    Are we really that concerned with who wrote it? What does knowing that solve? – NOTHING! It does not get the money back, it does not make AIG operate any differently. Once again, we avoid the real problem, which is AIG's inability to operate a profitable business even after the bailout, and we continue to talk and hear about everything but how to get the issue resolved. After the Bailout, the company continues to underperform. If I ran my business this way I would have had to file chapter 11. Time to make them(AIG) sell of the policies to others(state farm, allstate, farmers), and start closing branches of the company that are not turning a profit. The longer we wait the worse this issue will grow.

    March 20, 2009 at 12:19 pm |
  11. Annie Kate

    Even if the language was put in the bill to honor contracts prior to Feb. 1 2009, I would respect whoever put the rider in the bill a lot more if he or she just said so and cited that as a reason. Laws are generally not retroactive and I doubt we would want to get rid of that feature – just think of all the mess it would cause. But Drew, if you are looking for transparency in our government I'm afraid you are tilting at windmills.

    March 20, 2009 at 12:11 pm |