Dodd has set the record straight on the issue, and his account parallels media descriptions of the proposed amendment that were first published in February. Dodd certainly introduced an amendment to the stimulus package which would have toughened restrictions on executive pay, but the measure would have applied retroactively.
After Dodd proposed his amendment, White House and Treasury Department officials publicly stated their disagreement with the measure. The Treasury Department had previously issued a weaker regulation that was made even weaker because it only applied prospectively to companies that had not received any TARP assistance.
Dodd's amendment, however, passed in the Senate. But when the final bill emerged from the conference committee, the language making Dodd's amendment retroactive had vanished.
Dodd now confirms that the Obama administration pressured him to delete the retroactivity clause while negotiators worked on the final version. Dodd says that he feared losing the executive compensation provision altogether, and this made him compromise with the Treasury Department (which undoubtedly spoke for the President).
The Huffington Post has the full story. Here is a clip:
The Treasury Department demanded that Sen. Chris Dodd insert exemptions into the stimulus bill that allowed bailout recipients to receive bonuses, the Connecticut Democrat said on Wednesday.Fascinating.
According to Dodd, officials at Treasury expressed concern that if the government were to prohibit payouts, it risked being sued by companies like AIG, which had contracts stipulating that bonuses were to be paid.
At the urging of Treasury officials, Dodd modified a clause he had previously inserted into the stimulus that prohibited bonuses from being issued by bailed-out companies. An exemption was added to allow bonuses that applied to in-place contracts.