Democratic leaders came to the defense of Sen. Chris Dodd (D-Conn.) on Thursday afternoon, focusing blame on the Federal Reserve for the AIG bonus scandal. Senate Majority Leader Harry Reid, however, refused to discuss who made the decision to remove a provision from the stimulus package that would have blocked the AIG bonus payments. The provision was replaced by language written by Dodd, which wasn't retroactive.
"I not only don't want to talk," Reid told reporters. "I'm not going to."
Reid, however, defended Dodd in general terms. "But for Senator Dodd, there would be nothing in this legislation," said Reid. Pressed further on Dodd's role, he suggested, "I think what you should do is talk to Senator Dodd." Speaker Nancy Pelosi made a similar suggestion earlier Thursday to reporters.
Reid sought to focus on the role of Federal Reserve Chairman Ben Bernanke. "What is the administration? Remember, Bernanke, I guess using the term very broadly, is part of the administration," said Reid.
Majority Whip Dick Durbin (D-Ill.) also pinned the blame on the Fed. "It was a Fed decision to put money into AIG initially and it has been a Fed-driven process which, I understand, they approved the bonuses at the Federal Reserve. Now, I don't know who that means, whether it's Mr. Bernanke or somebody else. That, I think, was a big error," he said.
Durbin said he was concerned about the pressure that had been put on Dodd to weaken the compensation provision.
"I think Dodd has been under siege for so long. He has been a piñata for the Wall Street Journal, just beating on him unmercifully, day after day," said Durbin. "It's an extremely tough assignment dealing with the banking committee in the midst of one of our worst recessions. He's a very competent and honest person and I think at the end of the day he'll be just fine."
On Wednesday night, Dodd touched off a firestorm with his appearance on CNN, when he admitted that he had a role in inserting the language that put a specific date cutoff on the compensation provision. The Treasury Department had pushed him to do so, Dodd said.
Durbin was asked if Dodd made a mistake in deciding to talk about the provision on live TV.
"At some point, you've got to stand up and defend yourself, explain yourself," said Durbin. "And he felt this was the time."