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.
Original Post:
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.
Time for us to take back our power.
Glenn Smith Author of Lotus Petal, A Parable to Help You to Overcome The Fear of Death
http://lotuspetalbook.com
Why does he still have a job?
1. Audited Profits of Company and Division/Department at end of year and over prior 3 years.
2. Audited Profits must be at least >100 times the amount of all incomes paid.
3. Audited Profits of the Deals Employee produced three years after deals completed.
4. Must include full audited documentation with profit flows each year.
5. Limit all Executives', Managers' and Sales Persons' Total Incomes to US President's Total Income as determined by Government Accounting Office (GAO), perhaps $1.5 million.
US President gets $400,000 + White House Use + Air Force One Use + Fringes = $1.5 Million/year as determined by Government Accounting Office who is responsible for determining amount on a yearly basis.
No longer will Revenue or Assumed profit be the goal for evaluating effectiveness!
Instead only REAL AUDITED Profits over multiple (3) years will be considered in evaluating Incomes or Bonuses.
This does not apply to those who own a private company or work for themselves!
Employees of public corporations responsible to their Stock Holders and other Stake Holders should not be able to SKIM PROFITS into their Pockets using their own invented rules.
http://news.yahoo.com/s/politico/20090320/pl_politico/20299;_ylt=AkYD21Jrctqm1SyXjQaYGtqs0NUE;_ylu=X3oDMTFlcHZhOWJsBHBvcwM4NQRzZWMDYWNjb3JkaW9uX3BvbGl0aWNzBHNsawNob3dpYm90Y2hlZHQ-
Nuff said.
http://www.factcheck.org/politics/blame_dodd_attacks_ignore_facts.html
FTA-
the dodd amendment states:
"H.R. 1, Senate version: ... a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly compensated employees, or such higher number as the Secretary may determine is in the public interest ... "
this got passed and added to the stim by voice vote in the senate
geithner summers and obama administration became worried that banks wouldn't take the money. So the bill ended in committee before being passed in the house.
the final version? :
"H.R. 1, Final version: ... 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."
" The conference committee's report is signed by Democratic Sens. Daniel Inouye of Hawaii, Max Baucus of Montana and Harry Reid of Nevada, and Democratic House members David Obey of Wisconsin, Charles Rangel of New York and Henry Waxman of California. No Republican.
So it's easy to know who's fingerprints are all over the dodd amendment even as he continues to be crucified in the press.
If the Obama administration accepts that decision, than it will be an endorsement of a clear misuse of public funds. Giving taxpayers’s money to AIG executives for bonuses is banana republic nonsense and there should not be any room for these deals in the USA.
As for hard core Democrats who will attempt to blame the previous administration, please note that every sitting administration has a responsibility to strengthen the country, to remedy what they think previous administrations could not or did not do and to improve what will benefit the entire country.
Also another good article at 9 pages..."The End of Wall Street's Boom"
The Repub sheeple still believe the ACORN lie from the election and believe banks were pressured into making unsound loans by laws designed to force them to lend to minorities. The law they think they are referring to in the Fair Housing Act of 1977 but the lending restrictions were eased by their hero Dubya. There wasn't any ACORN involvement. So, thanks in spreading the truth far and wide. I don't think any of the Repub sheeple will buy it, but, at this point in time, I think they are a lost cause. We need the moderate middle to know the truth....
It seems to me that, given the legal nature of these bonuses, the provisions were killed simply because all these Ivy League trained attorneys & MBA's knew that they were not legally sound. They should have just told the U.S. populace this legal fact, but it's likely that few of us would have listened -- and they knew that.
The major problem here is that there are very few real problem solvers in Washington. We need unorthodox (but legal) solutions to the problems, failures and resultant catastrophes of deregulation. I think that this incident proves that neither the administration, the congress, the political media (including bloggers) or the U.S. populace is really ready to accept a new way of doing things and unless we start thinking out of the box & implementing solutions that benefit the country, we won't survive this vortex.
The blame game that everyone is currently playing about this is the proof that there is little forward thinking surrounding the administration. President Obama's & Secretary Geithner's ownership of responsibility are rallying cries -- attempts to stop us from unnecessary blame & calls to forward movement. However, we are locked into a cultural paradigm which supports our efforts to foist blame onto someone else more than to support efforts to come up with something new.
This episode is a portent of things to
Answer: we have a citizenry which is addicted to feel good delusion and convenient, supposedly justifiable lies.
Next week Barney Frank intends to propose legislation that would ban bonuses at any company that received federal bailout money. If this bill were to pass (I doubt it will, because it is most likely unconstitutional--which begs the question--aren't the guys in congress supposed to understand law?), I will quit my job at the company I work at because I can't make enough money to pay my bills under this plan. The company I work for will then lose an employee that has made them tens of millions of dollars over the years (my division had its most profitable division ever this year, BTW), and therefore the government's investment (it ain't a gift--it is very expensive money) in my company will be weakened. BTW, my company hasn't lost any money due to subprime lending, etc--we were profitable last year, but we were pressured by the government to take TARP funds--"to strengthen the public confidence". (continued)