March 19th, 2009
04:25 PM ET
5 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. 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 03:54 pm at 3:54 pm |
  2. no corporate politics

    AIG's $100,000 donation to Obama was money well spent! Those of you that are giving Obama all the credit for the good stuff happening, remember he signed this bill too!

    Lack of awareness and responsibility is how Bush exectued his post. Now Obama is doing the same. Didn't I hear something about Change?

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

    I think all involved should step down. The President would not listen when people voiced their discontent with the appt of Geithner. He has an image problem with not paying his taxes and then being appointed to the important position. Also shows Dodd is not trustworthy. No one will ever convince me that Obama didn't know about all of this. sounds like the Chicago thug methods was used and guess what, they got caught. Now Obama will go on Leno and make light of it and tell us to go on until more is discovered on crooked policies. Fannie Mae and Freddie are now getting bonus. and by the way, didnt Dodd and all of the crooks up there get a raise for themselves. Tax them at 90%!!!

    March 19, 2009 03:54 pm at 3:54 pm |
  4. Debbie C

    This guy needs to go!!!! Anyone knows a bankrupt company cannot be sued to pay bonuses – how many liars can there be in the government???? We need someone that has a brain and COMMON SENSE!!!!!

    March 19, 2009 03:54 pm at 3:54 pm |
  5. stan boren

    With all of the oratory skill that Pres. Obama has displayed on the way to White House, he needs to convey who, what and why his administration is so riddled with seeming incompetence and inability to have paid taxes due. I am very disappointed, and all this while trying to ram an amnesty bill down our unsuspecting throats after having removed the e-verify 5 year extension in the stimulus bill.

    March 19, 2009 03:55 pm at 3:55 pm |
  6. Glennis

    Just when you think the government couldn't possibly do anything more outrageously stupid, this comes along. It's simply unbelievable that Congress is now slapping a 90% tax on them after they and their incompetent enablers in the Obama administration were responsible for AIG getting those bonuses in the first place. You'd better believe the lawyers are licking their chops at this opportunity!

    March 19, 2009 03:55 pm at 3:55 pm |
  7. Chuck

    Our leaders should only be concerned about doing the right thing and then defend lawsuits if necessary. It is not right to give borrowed taxpayer funds to banks at all because they would raise rates and foreclose in a heartbeat on the taxpayers that get the bill. That is the source of deep anger. Degregulating lenders may be the worst thing Bush and Republicans in Congress did, but its hard to compete with borrowing money from China to wage war on Iraq that did not attack us instead of Al Qaeda that did.

    March 19, 2009 03:56 pm at 3:56 pm |
  8. Terry McCormick

    What does it mean that he takes full responsibility? I voted for Obama, but the Wall Street crowd appears to have borne no consequences for this disaster. Geithner should resign. It's time to accept the consequences of taking responsility.

    March 19, 2009 03:56 pm at 3:56 pm |
  9. jim

    This is what I like about dem's, they are honorable enough to take responsibility for their mistake's. Unlike the republicans who will place blame on everyone else before they look to themselves. They have the nerve to say the last 8 years was because of "liberals" or "communists" or what ever come's out of those crazy hatefilled wacko's mouth's, they are such scum.

    March 19, 2009 03:57 pm at 3:57 pm |
  10. ANGIE IN PA

    Geithener Did what he Could do LEGALLY! AIG HAD LEGAL CONTRACTS The Goverment has no Right To tell them about their Contracts, Thats SOCIALISM And could of led to LAWSUITS! At least he is Admitting it Unlike the Past Administration They did no wrong Cheney says!

    March 19, 2009 03:57 pm at 3:57 pm |
  11. 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 03:57 pm at 3:57 pm |
  12. Tim, Seattle

    The facts and a non-mob mentality point of view:

    PROBLEM: AIG is so big and entrenched Globally, it cant be allowed to fail. NO ONE disputes that. If it fails, the damage will be far worse to the economy. So letting it fail is not an option. PERIOD!

    SOLUTION: Regulate more through anti-trust laws so that companies can never get so big their failure would bring down the US or Global economy.

    PROBLEM: Bonuses paid to AIG coming from public money

    SOLUTION: Either honor contractually obligated bonuses or enact a bill to get the $ back (this is already underway)

    PROBLEM: Who knew what when? It was Treasury who inserted the loophole language. Now you know. But does that fact change anything? Not really

    SOLUTION: Keep Geitner on. To let him go could cause panic and it fuels the media to start pinning all this on the president (which all are itching to do)
    The public, the media and especially the republicans want someone to step up to the guillotine so that the pitchfork and torch 'mob' can have some satisfaction. But for what?
    They all need to remember that both dems and GOPers alike stated public support for Geitner all saying he is hands-down the most quaified to understand how to deal with the problems. The bench is not deep and no one is going to want to come aboard and ramp up

    March 19, 2009 03:57 pm at 3:57 pm |
  13. Chris

    I see a resignation in the crystal ball, at least there should be one!

    March 19, 2009 03:57 pm at 3:57 pm |
  14. Carol Spence

    There is an old saying " When a person shows you who they are you'd better believe them" Is Geither and Dodds for President Obama or against him ? or is this just an example of what has always happened in Washington , it seems like the old throw the old rock and then hide your hand .

    March 19, 2009 03:57 pm at 3:57 pm |
  15. Realisticly Speaking

    Who are these people that keep saying "Is that change we can believe in"?

    What person expects 30 yrs of government ineptness should go away
    in TWO MONTHS!!!!!!!!!!!!!!!!!

    AGAIN, WHO EXPECTS 30 YEARS OF INEPTITUDE TO GO AWAY IN TWO MONTHS!!!!!

    March 19, 2009 03:57 pm at 3:57 pm |
  16. Carol Spence

    There is an old saying " When a person shows you who they are you'd better believe them" Is Geither and Dodds for President Obama or against him ? or is this just an example of what has always happened in Washington , it seems like the old throw the old rock and then hide your hand .

    March 19, 2009 03:57 pm at 3:57 pm |
  17. JJ12345

    Eric March 19th, 2009 3:47 pm ET

    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.
    _________________________________________________
    Two days ago Dodd said he had nothing to do with it, he admitted it because he had no choice and threw the administration under the bus to protect himself. He would have never admitted it unless it was going to be brought out anyway. Dont give him credit for integrity. Where is his countrywide mortgage paperwork that he said he was going to release last year?

    March 19, 2009 03:57 pm at 3:57 pm |
  18. Maggie in NY

    flybyshoeing – I agree with you.

    March 19, 2009 03:57 pm at 3:57 pm |
  19. Had It

    The contracts were legal and binding.

    Congress cannot make a new law goes into effect retro-actively. THAT would violate the constitution.

    People - it's awful, but it's the LEGAL way to change now and future. As disgusting as this whole mess is, at least there is a BEGINNING to cleaning it up.

    March 19, 2009 03:57 pm at 3:57 pm |
  20. d1120

    ANYONE would be better than him...

    March 19, 2009 03:58 pm at 3:58 pm |
  21. Skip, a black man

    Obama MUST step down!

    March 19, 2009 03:58 pm at 3:58 pm |
  22. momof3

    so.. they're taking responsibility... Obama said he is to blame... are they going to pay for their mess??? or since their popularity are so high... it's ok for them to do so... MOVE ON... people... this is THE CHANGE that we promised you....!!

    March 19, 2009 03:58 pm at 3:58 pm |
  23. rufus

    What a total, complete disgrace. The tax on the bonuses is even more disgraceful.

    March 19, 2009 03:59 pm at 3:59 pm |
  24. Fitz in Texas

    LIE LIE LIE-–That's the one thing Geithner seems to be good at, besides not paying his taxes.

    Obama hired him and Obama needs to FIRE Geithner.

    I can only hope that in 2012 the American people FIRE Obama as well!

    March 19, 2009 03:59 pm at 3:59 pm |
  25. Betty

    This tax issue with AIG is so small compared to the stimulous package that was signed before anyone could read it. Which included bonus for AIG. The american public is not upset over the AIG issue as they are the leadership in Washington. Americans don't like goverment that is croocked which this goverment is and the games being played at the exspence of all of us. The AIG does not compare to the pork spending the goverment is doing. They should have explained where every dime is going and each ear mark . Now that is a waste of tax payers dollars. And much worst then AIG issue...

    March 19, 2009 04:00 pm at 4:00 pm |
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