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Thursday, March 19, 2009

AIG Clusterf*ck and the Obama Administration

By now everyone knows about the $165 billion in bonuses AIG handed out to their executives and former executives, because it was in their original contracts.

Yesterday we saw news that the Obama administration knew, before they gave AIG an additional $30 billion bailout, about those bonuses. As well as finding out that the stimulus bill which Obama signed, without giving the public the promised days to look into it, had an amendment which guaranteed those bonuses would be handed out.

Reports also showed that Senator Chris Dodd (D-CT)was the writer of the amendment that passed the House, the Senate and was signed by Barack Obama himself, in which those bonuses were guaranteed.

When news first broke about Dodd having inserted that amendment, Dodd denied it, then when he couldn't deny it anymore, he admitted it as reported by CNN.

In that report, it states clearly, even in the headline, that the Obama administration pushed for the "language" in the amendment which would protect those bonuses.

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language.

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.

"The administration had expressed reservations," Dodd said. "They asked for modifications. The alternative was losing the amendment entirely."

CNN actually called Dodd out on his previous lie, video below:

TIME also has a stunning report about when the Treasury knew of these bonuses. The question "who knew what and when" has become the $64,000 question.

Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG's impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is 10 days before Treasury staffers say they first learned "full details" of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.

"Treasury staff was informed about the new bonuses in a Feb. 28 memo that the March 15 [bonus-payment] date was upcoming," a Federal Reserve source tells TIME. A Treasury Department source, speaking on background, confirmed the e-mail memo and its contents, saying, "Everybody knew that [AIG] had a retention issue."

The New York Fed even went so far as to warn Treasury staffers that the bonuses were a hot-button issue. In the past, the memo says, the "retention," or bonus, issue has drawn the attention of both Capitol Hill staffers and the media. The New York Federal Reserve forwarded further details of the plan to Treasury on March 5 and even more specifics in a March 9 memo, which Treasury officials had previously said was their first detailed warning of the bonus trouble.

The Treasury knew the bonuses were going out before the bailout. The Obama administration knew and pressured for the language in the stimulus bill that woudl protect those bonuses.

Obama signed the bill.

Then on Monday, Barack Obama shared our "outrage".

This is what you call a clusterfuck folks and the possibilities are few, but before we list them, you need to read the latest spin, from Washington Post on "How the Fed Failed to Tell Obama About The Bonuses."

Federal Reserve officials knew for months about bonuses at American International Group but failed to tell the Obama administration, according to government and company officials, exposing problems in a relationship that is vital to addressing the financial crisis.

As pressure mounted on AIG employees to return the bonuses, new details emerged yesterday about what the Fed, the Treasury Department and the White House knew regarding the payments and when. AIG executives said the Fed was informed three months ago by the company that it would pay $165 million by March 15 to employees working at its most troubled division. The Treasury and White House said they learned of the payments from Fed officials only days before they were due.

It is suggested to scroll back up to the TIME article and reread it at this point, because the Treasury didn't find out "days" in advance, they found out weeks in advance, before the bailout.

Wapo must have missed that information while trying to spin.

So, here are the options, pick one and see if it makes you feel all warm and fuzzy.

First: The Obama administration knew well ahead of time about the bonuses, but when the public learned that $165 billion of their tax dollars was to be paid out as executive "bonuses" and got angry, Obama decided to claim no prior knowledge and join the public in their anger.

OR we have the second possibility: The left hand had no idea what the right hand was doing and Obama signed the stimulus bill, to the tune of $800 billion tax payers dollars, without reading it or knowing about the amendment which guaranteed those bonuses to AIG execs.

Which makes you feel better?

That Obama lied with a straight face to the American people again or that his administration hasn't a clue what is going on around them or last but never least, that Barack Obama is willing to sign away $800 billion of your tax dollars without knowing what is in the bill?

We all warm and fuzzy yet?

[Update] A couple videos that need to be seen where Barney Frank blows off death threats to the execs of AIG, including threats against their children and families.