March 19th, 2009
04:25 PM ET
6 years ago

Geithner: Treasury pushed for bonus loophole

Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill allowing bonuses to be paid.
Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill allowing bonuses to be paid.

(CNN) - Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses.

In an interview with CNN's Ali Velshi, Geithner said the Treasury Department was particularly concerned the government would face lawsuits if bonus contracts were breached.

Watch: Geithner on AIG bonuses

Dodd admitted to CNN Wednesday he'd added the controversial provision after a Treasury official pushed for it. Earlier in the week, Dodd had said he had not played any role in the addition of the loophole.

Geithner told Velshi Thursday he takes full responsibility for the situation.

Also in the interview, airing in part at 5 pm ET on CNN, Geithner said:

- He does not believe TARP or the stimulus bill was rushed through Congress

- Calls for resignation are part of the job

-Officials will make sure that any further money comes with provisions (including executive compensation)

-His team will have a detailed plan for the banks w/in the next couple of weeks

-The recession will likely end in 2009, and 2010 will be a year of growth

See the comments this afternoon at 5 pm ET on CNN


Filed under: Chris Dodd • Timothy Geithner
soundoff (107 Responses)
  1. Eric

    Well at least they admitted to it-unlike Bush/Cheney. I mean they aren't hiding anything-we know what's going on. I honestly believe them.

    March 19, 2009 03:47 pm at 3:47 pm |
  2. Richard Wilson

    They basically stole money. Legally, unfortunately. However extremely unethically, leaving the only reasonable option as the resignation of both Geithner and Dodd.

    March 19, 2009 03:47 pm at 3:47 pm |
  3. Proud Soldeirs Mom

    For those that blame Bush for the first AIG bail out, Bush didn’t bail out AIG the first time, the Federal Reserve did, without Congress or the President’s approval. The guy who signed off on that bailout was the head of the New York Federal Reserve at the time, Timothy Geithner.

    March 19, 2009 03:48 pm at 3:48 pm |
  4. AndyB

    ha ha This is funny. All the righties are calling for a resignation LOL They want their pound of flesh and they want it now. Well toooo bad.
    What goes around comes around.

    March 19, 2009 03:49 pm at 3:49 pm |
  5. Proud Soldeirs Mom

    Bush didn’t bail out AIG the first time, the Federal Reserve did, without Congress or the President’s approval. The guy who signed off on that bailout was the head of the New York Federal Reserve at the time, Timothy Geithner.

    March 19, 2009 03:49 pm at 3:49 pm |
  6. slickingdom

    Let's not go crooked, here Timmy.....So far it's:

    Timothy Geithner
    Roland Burris

    Any other Democrats care to sign up with these two ??

    March 19, 2009 03:49 pm at 3:49 pm |
  7. candian pov

    Oh but Joe Average can have his collective bargaining agreement tossed out so the Big Three can survive but the cheats that got the world into this mess are bound by their iron clad agreements? A den of thieves is what they are.

    March 19, 2009 03:50 pm at 3:50 pm |
  8. CC

    Don't let the door hit you on your way out you lying little twit!

    March 19, 2009 03:50 pm at 3:50 pm |
  9. an american first

    So all economists are now agreeing that "We have avoided a Great Depression-2 scenario". Instead of naming Geithner as the "Person of the Year" because of this quick 8 weeks turnaround, we are all outraged about this $165 millions in bonuses. This may be the biggest distraction ever. This is exactly why we haven't yet fixed our healthcare, education, and social security issues. Because we are all distracted by the next story.

    Think about this – $165 millions is actually 1/10th of 1% of the $161billions that are given out to AIG so far. Let me repeat, it is 0.10% of total money handed out to AIG. Stop this emotional nonsense yall and let's get this economy fixed with some real debates.

    March 19, 2009 03:51 pm at 3:51 pm |
  10. sharon

    The partial solution is enough pressure on the president to start cl eaning house....before things get too far out of control, and Obama needs to start monitoring his group more closely, instead of making excuses. I am convinced that his lack of experience is causing him problems. I also think that instead of his junkets perhaps he needs to stay at the office and do what he was elected to do. As for Dodd and the others we will have another election and I hope Americans will remember what has happened , when they vote!

    March 19, 2009 03:51 pm at 3:51 pm |
  11. Los

    OK, all you people calling for his resignation, how about you offer some solutions instead of just gripes: WHO SHOULD TAKE HIS PLACE THEN?

    March 19, 2009 03:51 pm at 3:51 pm |
  12. Wolf-Woman Palin Charlotte, NC

    The dang thing about this is the Repubs are having an orgasm in that these bonuses take the ligt off those who brought this recession in the first place... they did!

    March 19, 2009 03:52 pm at 3:52 pm |
  13. Al

    BONUSGATE

    For the good of the new administration, Mr. Geitner should step down immediately. The President needs to investigate what happened, particularly Senator Dodd's role, and give full disclosure to the American people. Most Americans, like me, have great hope for our new President, but he must get all of the bonus money back, and tell the American people what really happened. We don't need more senate hearings, special prosecutors, or wasted money, we need the transparency and honesty that Barack Obama promised. Mr. President, don't let us down.

    March 19, 2009 03:52 pm at 3:52 pm |
  14. gl, Pittsburgh

    President Obama was in a no win situation becasue the Republicans was calling the President Socialis and nationalizing the banks.

    March 19, 2009 03:52 pm at 3:52 pm |
  15. John G

    This is like the third person to take responsibility! Fix it and stop talking about it!

    March 19, 2009 03:52 pm at 3:52 pm |
  16. Rivertrip

    Wasn't Dodd the one that received the largest "contribution" from AIG?
    Is this the change we can believe in?

    My boss has been a life long democrat.

    He now says he is a confirmed Independent.

    Wake up everyone!! Do not march lockstep with either major party.

    March 19, 2009 03:52 pm at 3:52 pm |
  17. Lotta Muni

    And while everyone focuses on the $165 million in the left hand, poof, the illusionist makes $700+ billion disappear from our pockets without us even noticing, just like magic!

    March 19, 2009 03:52 pm at 3:52 pm |
  18. Norma

    There is not one Politician that can be trusted, not one. It used to be an honer to represent your state, now you are no better than menbers of the crime syndicate, only difference being, you are able to get away with it.
    Please find the few that voted against the stimulas packages, and those are the only ones that deserve any honor, they are the only ones that voted according to the peoples wishes, where were they in the November election?.
    Our President panicked and acted in haste, this is the man that not only has power over our money, but also our lives, now we panic.
    Very scarry and sad situation.

    March 19, 2009 03:53 pm at 3:53 pm |
  19. Tom in Delaware

    Mr. Geithner, Mr. Geithner, your reservation underneath the Obama Bus has just been confirmed.

    March 19, 2009 03:53 pm at 3:53 pm |
  20. anne

    Well, I think it's time for Geithner to go. I don't buy his explaination that he was afraid the govt would be sued. BOGUS. He obviously still works for Wallstreet and AIG and not for the people of this country. He needs to quit or be fired. I do wonder if Obama new about this. He does have a lot to do and seems to have left all this in Geithner hands. It wouldn't surprise me if he didn't know until last week. He can't be everywhere at once though people seem to think he should be. That is what he have cabinet members for. But he obviously can't trust Geithner and it has gotten him into hot water. Get rid of him.

    March 19, 2009 03:53 pm at 3:53 pm |
  21. anne

    Well, I think it's time for Geithner to go. I don't buy his explaination that he was afraid the govt would be sued. BOGUS. He obviously still works for Wallstreet and AIG and not for the people of this country. He needs to quit or be fired. I do wonder if Obama new about this. He does have a lot to do and seems to have left all this in Geithner hands. It wouldn't surprise me if he didn't know until last week. He can't be everywhere at once though people seem to think he should be. That is what he have cabinet members for. But he obviously can't trust Geithner and it has gotten him into hot water. Get rid of him.

    March 19, 2009 03:53 pm at 3:53 pm |
  22. Nana5

    How sweet – everyone, even your President – is taking responsibility. Now just get rid of all those responsible. Duh – that's a no-brainer. If I make a mistake in my job that cost either the company or clients money, you can bet I'd be a gonner!! Get rid of the whole bunch of no-accounts. I don't care if they are democrat, republican or what. It's time to not only own up to what you've done – do the honorable thing – resign and do the American taxpayers a favor.

    March 19, 2009 03:54 pm at 3:54 pm |
  23. Lou C

    I thought the Government could only be sued when they agree to be sued. Why is the Govt afraid of 30 to 40 Ponzi Scammers ? This acceptance and payout of millions of dollars for failure has to stop somewhere. Come on, lets go to court with a jury of regular citizens !

    March 19, 2009 03:54 pm at 3:54 pm |
  24. Bridgette

    I can't believe that people who have a felony on their record can't find jobs for the petty crimes that they usually committ but these crooks can go from company to company robbing and stealing everything in site. The blame here rest on AIG. They knew they should not have given those bonuses out. This is not all the politicians fault and believe me I am the last one to defend these idiots. But this mess is to the point where it is just ridiculous. These CEO's and there crews have gotten so use to doing this that they feel the money is their birth right.

    March 19, 2009 03:54 pm at 3:54 pm |
  25. Roy

    The Real Message here:
    -Democratic or Republican......there is a level of executive and management in this country today who are SPOILED SILLY......who think they deserve ridiculous salaries.....and on top of THAT, even more money to 'Keep Me Here'.....or they run crying to another big business to do the same thing.

    This is DISGRACEFUL.......when we have almost 9% unemployment in this country....the greed of this stratified group of executives is SHAMEFUL........whether democratic or republican. These executives regard themselves (like Madoff) as above the rest of us, above the government, above the law...this MUST be stopped or business as we know it in this country will collapse regardless of what either party does.

    March 19, 2009 03:54 pm at 3:54 pm |
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