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Faux outrage, part 2

Posted by Richard on March 19, 2009

The evidence of what I referred to as hokum and hypocrisy regarding bailouts and bonuses is piling up, and Investor's Business Daily has again focused attention on some of the worst. For example, Rep. Barney Frank's grilling at a committee hearing of the new AIG CEO, Edward Liddy (emphasis added):

Liddy, brought in for a dollar a year after the market meltdown Frank had a hand in creating, wasn't the one who should have been in the dock. Frank should have been grilling his Senate colleague Chris Dodd, who now admits writing the language in the stimulus that made these bonuses exempt from any government restrictions.

Sitting next to Dodd should have been Treasury Secretary Timothy Geithner, late of the Federal Reserve in New York and the architect of the original AIG bailout. After saying he didn't know who wrote the stimulus language exempting AIG bonuses, he now says he did it at the request of Treasury and administration officials.

[After first denying it, Dodd] told a different story, acknowledging that he and his staff did in fact change the language in the stimulus bill to include a loophole for AIG executive bonuses. "As many know, the administration was, among others, not happy with the language. They wanted some modifications in it.

"They came to us, our staff, and asked for changes, and the changes at the time did not seem obnoxious or onerous," Dodd added.

Say what? Exempting AIG bonuses to be paid out with taxpayer dollars seemed harmless to the No. 1 recipient of AIG campaign cash? Some have called this a "reversal" of position. We call it a lie admitted to.

Now we learn that Fannie Mae, a bailout beneficiary and the ignition source of the mortgage meltdown, plans to pay its own retention bonuses of at least $1 million to four executives as part of a plan to keep hundreds of employees from leaving. Let them work for a buck too.

Just as was the case with Fannie Mae and Freddie Mac, Congress and the administration had a chance to stop this. Instead they protected AIG with a bill written in the middle of the night, sliced and diced by a handful of Democrats in a closed conference room, that those voting on it had not read.

Frank et al. have forgotten how Franklin Raines, who headed Fannie from 1998 to 2004, the years of its worst excesses, pocketed nearly $100 million in pay and bonuses from Fannie. He later became an adviser to Obama, the No. 2 recipient of AIG campaign funds behind Dodd.

This is the administration and Congress that promised to be the most transparent ever. They're transparent all right. We can see right through them.


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