A FoxBusiness.com article reporting on an amendment that Sen. Chris Dodd added to the recovery bill featured the false headline -- subsequently posted by the Drudge Report -- “Amid AIG Furor, Dodd Tries to Undo Bonus Protections He Put In.” Additionally, Fox News' Trace Gallagher falsely claimed that Dodd “created a loophole that allowed AIG to give out these bonuses.” Rush Limbaugh also falsely asserted that Dodd's amendment provided an “exemption from any limits on” contractual bonuses agreed to before February 11. In fact, Dodd's amendment actually limited bonuses; it did not add “protection” for bonuses or “create a loophole” without which the bonuses could not be paid.
A March 17 FoxBusiness.com article reporting on an amendment that Sen. Chris Dodd (D-CT) added to the American Recovery and Reinvestment Act featured the false headline -- subsequently posted by the Drudge Report -- “Amid AIG Furor, Dodd Tries to Undo Bonus Protections He Put In.” Additionally, Fox News anchor Trace Gallagher falsely claimed that Dodd “created a loophole that allowed AIG to give out these bonuses.” And Rush Limbaugh falsely asserted on the March 17 edition of his radio show that Dodd's amendment provided an “exemption from any limits on” contractual bonuses agreed to before February 11. In fact, Dodd's amendment actually limited bonuses; it did not add “protection” for bonuses or “create a loophole” without which the bonuses could not be paid. Nor did it provide an “exemption from any limits” on bonuses agreed to before February 11.
In the article, FoxBusiness.com reported, “Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group ... bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit.” The article later stated: “While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill” [emphasis added]. Indeed, Dodd's amendment as introduced directed the Treasury secretary to require each Troubled Asset Relief Program (TARP) recipient to “meet appropriate standards for executive compensation and corporate governance” : “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 with respect to any TARP recipient.”
The Senate adopted Dodd's amendment by voice vote. Subsequently, the conference committee assigned to work out the differences between the Senate version of the recovery bill and the House version -- which did not contain such a limitation on executive compensation -- included Dodd's amendment "with several modifications" in its version of the bill. Among those modifications, the bill adopted by the conference committee included the following language:
The prohibition required under clause (i) 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 [of the Treasury] or the designee of the Secretary.
The amendment as modified by the conference committee was included in the final recovery bill passed by Congress and signed by President Obama.
Neither the amendment as offered by Dodd nor as modified by the conference committee contained an “exemption from any limits” for bonuses agreed to before February 11 as Limbaugh claimed. It only exempts such bonuses from the restrictions outlined in Dodd's amendment.
From the March 17 FoxBusiness.com article:
Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9051, 0.125, 16.02%) bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.
The move represents somewhat of an about-face for the Senator.
While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.
The amendment made it into the final version of the bill, and is law.
From the Drudge Report:
From the March 17 edition of Fox News' The Live Desk with Martha and Trace:
GALLAGHER: Some of the anger is now targeting Capitol Hill, and here's why: Apparently, when senators debated the stimulus package, Connecticut Senator Chris Dodd -- he created a loophole that allowed AIG to give out these bonuses.
It turns out the senator got more campaign donations from AIG last year than any other elected official.
Rich Edson from Fox Business Network is here to sort all this out. I mean, it just doesn't sound good on its face, Rich.
EDSON: No, it certainly doesn't, and when you look at the history of this, last night you had Senator Chris Dodd essentially saying that we should devise a tax to get this bonus money back. But when you look at the Dodd amendment that the administration talks about when it calls for many of the executive pay restrictions to the stimulus bill, there is one provision in that bill that essentially says any contract that was created before this stimulus bill gets into law -- it's still valid. It doesn't apply to any of these executive compensation curbs.
GALLAGHER: And that's the gold question here, is, you know, you're talking about the fact that Chris Dodd -- and the exact number I forget, but you would know it -- and he got more than anybody else in Congress from AIG. AIG, by the way, one of their biggest offices is based in Connecticut.
So, is -- and then he goes out of his way to say, well, let's tax them -- let's get all this money back by taxing them.
From the March 17 broadcast of Premiere Radio Networks' The Rush Limbaugh Show:
LIMBAUGH: It's getting so ridiculous -- yesterday on radio station WMT in Cedar Rapids, Iowa Senator Chuck Grassley [R].
GRASSLEY [audio clip]: The first thing that would make me feel a little bit better towards them, if they'd follow the Japanese example and come before the American people and take that deep bow and say, “I'm sorry.” And then either do one of two things: resign or go commit suicide.
LIMBAUGH: Did you hear that? He wants the AIG bonus recipients to go commit suicide. Now, I know, he said later we're just talking about honor here. Honor? These bonuses were exempted by Chris Dodd in the “porkulus” bill. Dodd's own amendment, just to remind you, provides an exception for contractually obligated bonuses agreed on before February 11, 2009, and these are -- meaning, exemption from any limits on them.
The “porkulus” bill has an executive compensation pay limit, as you know. We're limiting executive pay. Chris Dodd put in his own bill -- his own amendment -- that exempts bonuses from this limitation. And he's out there now saying tax them at 90 percent. These people are the biggest frauds, artists of deceit -- they all are acting. Every damned one of them knew that this was coming. They are the architects of this. And so now Grassley goes out there, says these guys ought to commit hari-kari.