You would think that Congress would be wary of sanctioning more bonuses at bailed out institutions, particularly at AIG, but of course you’d only be partly right. Congress is more than happy to help those bankers, so long as it can do so in a way that, at least at the moment, is totally opaque (that being the opposite of transparent). The House recently considered a bill, co-sponsored among others, by Jim Himes, former Wall Streeter, to restrict bonuses at these government funded institutions.
In its original form, it required all TARP recipients to make all bonuses performance based, and sought to put an end to the $1 billion in retention bonuses still to be paid out in July and September this year by AIG per an agreement they reached with Treasury Secretary Timothy Geithner. In other words, AIG could only pay out bonuses if the company actually did well, and couldn’t be doling them out while the company was losing money and on taxpayer life support.
Quite a hardship, isn’t it? Requiring bonuses to be performance based. Too much of a hardship, apparently, for all but 8 Republicans and 63 (that’s right, 63) Democrats, including, as it turned out, Himes himself.
What to do? How to preserve those bonuses while avoiding political heat?
Well, you amend the bill to exempt any TARP recipient that has started to repay the loans. So, all the bonus deprived crooks that caused this mess have to do to cash in is return a few of our dollars and they are home free. The repayment plan must be approved by the Treasury, but given Geithner’s performance on this, as on so many other issues, don’t expect that he’ll impose onerous terms. In any event, what’s the justification for paying bonuses to people just for remaining on a job that plenty of ex-Wall Streeters would be happy to fill.
The other four Connecticut Congressfolks, including our Joe Courtney, voted against the amendment. Here’s hoping that there’s a political price to pay next year for those who figured they could ignore the public’s feeling about this issue so long as they could do so in a backdoor manner. And here’s hoping beyond hope that Treasury will impose significant payback requirements as a condition of getting the waiver.
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