Condemnation of AIG Coming From All Sides
Congressional leaders from all walks are joining President Obama in berating AIG for doling out millions in bonuses after accepting $170 billion in federal help.
Senate Majority Leader Harry Reid (D-Nev.) took to the chamber floor today to decry the news as a “breach of public trust,” while Senate Minority Leader Mitch McConnell (R-Ky.) called the episode “appalling.”
Sen. Christopher Dodd (D-Conn.), who heads the Senate Banking Committee, joined the chorus this afternoon, citing “another outrageous example of executives … enriching themselves at the expense of taxpayers.” Across the aisle from Dodd, Sen. Richard Shelby (Ala.), the senior Republican on the banking panel, told ABC’s Good Morning America Monday that many AIG executives “should be fired, not awarded bonuses.”
And the list goes on.
Still, it remains to be seen what legal recourse policymakers have to recover that money. Even if all $170 billion of AIG’s federal help had come from the Troubled Asset Relief Program (which it didn’t), that law was written with almost no conditions on how the money is spent.
Obama and Dodd, of all people, should remember that little detail. After all, they both rejected House-passed legislation that would have set stricter guidelines on TARP spending — a bill that, among other things, would have reined in executive compensation.
In the wake of the AIG outcry, will the Senate reconsider the merits of the House bill? Don’t count on it. As the stalled housing package is proving, the finance industry may be flailing for its life, but it still, in many ways, appears to control the strings of Congress.