UPDATE II, 3-19, 4:40pm (EST):
Tim Geithner has now confirmed Chris Dodd's contention that the Treasury Department had insisted he include a loophole in the stimulus bill that allowed AIG to pay out bonuses, despite receiving bailout money. Still no word, however, from Geithner -- or anyone else in the administration -- about the killing of Sen. Wyden's bonus amendment that is the subject of this post. But the circumstantial evidence pointing to Obama's economic team is mounting.
UPDATE, 3-18, 6:35pm (EST):
Appearing on CNN today, Sen. Chris Dodd, chairman of the Senate Banking Committee, said that officials at the Treasury Department had insisted that he modify a clause he had inserted into the stimulus bill that prohibited bonuses from being issued by bailed-out companies. This mirrors the legislative slaying of the similarly intended amendment co-sponsored by Sen. Wyden I write about below. The culprit behind the killing of the Wyden provision remains unsolved -- but Dodd fingering Treasury adds weight to Wyden's sense that members of Obama's economic team were behind the elimination of his amendment. And, in both cases, major decisions involving taxpayer money were carried out in a way that flies not in the face of fairness, but in the face of the administration's promises of transparency and accountability.
The mystery over who killed a provision in the stimulus package that would have curtailed bonuses at bailed out companies is a disturbing D.C. whodunit. But even more disturbing is what it reveals about how our government is run.
"It is the ultimate indictment of what Washington has become," Sen. Ron Wyden, co-sponsor of the eliminated provision, told me. "It's a place where, again and again, the public interest is deep-sixed behind closed doors and without any fingerprints."
For those of you who might have missed Sam Stein's original story, here it is in a nutshell:
Building on public outrage and presidential denunciations of executives at bailed out companies getting bonuses, Wyden and his Republican colleague, Sen. Olympia Snowe, crafted a provision in the stimulus bill that would have forced bailout recipients to cap their bonuses at $100,000 (any amount above that would be taxed at 35 percent).
According to Wyden, he "spent hours on the Senate floor," working to get the bipartisan amendment passed. He succeeded -- not a single Senator voted against the provision. "But," says Wyden, "it died in conference."
So who killed it? Wyden doesn't know.
Think about that for a second. We live in a country where one of the 100 most powerful people in government, the cosponsor of the amendment in question, has no clue how it got removed in the Senate-House conference committee -- or if it was taken out of the legislation even before it made it into conference.
And, so far, no one in the administration of a president who promised that transparency would be a "touchstone" of his presidency has demanded that whoever killed the provision step forward and own up to it.
It took Andrew Cuomo, using his authority as New York Attorney General, to get us at least some of the details about the AIG bonuses.
It's time for the White House to do the same, using its authority to uncover who removed the Wyden-Snowe provision from the stimulus bill.
"I pulled out all the stops," Wyden told me, "to convince the president's economic team that this amendment was vital to the White House for two reasons: 1) the president had spoken out against bonuses; 2) fury about bonuses would kneecap confidence in the president's entire economic policy."
But no one inside the president's economic team was in favor of it. As Wyden put it: "If the White House economic team had made it clear that this was important, this provision would never have been removed. I don't believe the president has been well-served on the bonus issue by his economic team."
So who asked for the amendment to be removed? Jason Furman? Peter Orszag? Tim Geithner? Larry Summers?
Such a move would certainly be consistent with the positions put forth by Summers who, as late as yesterday -- even contradicting the president -- continued to argue that attempting to stop the AIG bonuses would have "put the whole economy at risk."
Have you noticed how, whenever there is a serious effort to put an end to business-as-usual, we are warned by insiders like Paulson and Summers that the result will be the end of civilization?
"This lack of transparency -- and the lack of accountability that results -- is one of the most significant threats to our democracy," Wyden told me. "This is not at all how the civics books tell us the system is suppose to work. What we have here is a prime example of Washington deny, defer, delay."
He's right. We deserve better. Let's make this D.C. mystery the cause célèbre it deserves to be. Let's demand that the White House live up to its vows of transparency.
If you have any information about who killed the Wyden-Snowe bonus amendment, please let us know.
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