The doublespeak coming from leading Congressional Democrats and the Obama Administration has reached new heights this week. Taxpayers are rightfully outraged at reports that after financing hundreds of billions in federal bailouts, they are now also footing the bill for AIG executives receiving $165 million in retention pay and "performance-based" bonuses-- when many of these same executives are responsible for putting AIG in its untenable position in the first place.
The Administration is likewise expressing outrage over the AIG bonus payments, but this of course comes after White House Press Secretary Robert Gibbs assured the American people that the Administration knew how every dime AIG had received thus far had been spent. The White House continues to offer no explanation for the fact that these bonus contracts were on the books well before the most recent plan to award the struggling financial conglomerate with another $30 billion was announced.
To be clear, American taxpayers have financed AIG's bad investment and management decisions not once, but three times: first a $60 billion loan, then $50 billion to buy toxic assets, and then $40 billion to buy preferred shares of stock. And now, another $30 billion installment from the second half of TARP (Troubled Asset Relief Funds) approved earlier this year.
Then, Monday night, after most of the AIG bonuses had already been disbursed, Democrats began calling for a tax on the AIG executives who had received these hefty bonuses. Yet only a month ago, when the Senate considered the $787 billion stimulus bill, Senate Democrats passed an amendment by Senator Chris Dodd providing an exception for "contractually obligated bonuses agreed on before Feb. 11, 2009." That is, Senator Dodd and other Democrat leaders who are decrying the outrageousness of exorbitant executive bonuses were the very ones to guarantee that the bonus checks would be written.
Senator Dodd arguably wields more influence over the banking industry than any other Member of the U.S. Senate, as Chairman of the Senate Committee on Banking, Housing, and Urban Affairs. According to opensecrets.com, Senator Dodd was AIG's largest single recipient of campaign donations during the 2008 election cycle; and one of AIG's largest offices is based in Connecticut. The connection is stark: the Senator from Connecticut ensured executives were allowed to receive their exorbitant bonuses even at the expense of American people struggling to pay their bills and keep their homes.
Trent Franks is a Republican Congressman for the 2nd District of Arizona and has spent most of his life working on children’s issues and trying to build a better future for all children.