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

Geithner: Treasury pushed for bonus loophole

[cnn-photo-caption image= caption="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. Fredrick

    The government is certainly going to face lawsuits now, especially with what Congress recently did.

    March 19, 2009 03:27 pm at 3:27 pm |
  2. Firth Davenport

    What can be said? After defending the democrats it all boils down to the same thing – all politicians are corrupt. This system of government that we have cannot sustain itself by continually lying to the American public.

    March 19, 2009 03:28 pm at 3:28 pm |
  3. HelloooOOOOO

    Since he knew of all this, he should NOT have pushed for the so called loophole ! He needs to be fired !

    March 19, 2009 03:28 pm at 3:28 pm |
  4. Paul from Phoenix

    I am not buying it. This looks like the White House using Obama's popularity to protect Dodd.

    March 19, 2009 03:29 pm at 3:29 pm |
  5. ray ray

    Gaithner needs to be fired!

    Dodd needs to resign!

    Both are lying sacks of democrat dung.

    March 19, 2009 03:29 pm at 3:29 pm |
  6. Mike


    March 19, 2009 03:29 pm at 3:29 pm |
  7. Happy in Arizona

    This is a bunch of bull. Chris Dodd and Geithner should resign. You know as well as I do that this administration gets kick backs from these companies and therefore protect them at the taxpayer's expense. I am tired of hearing it's imperative we do something or everything will collapse. Let it collapse! The American people will then put it all back together. We certainly don't need these crooks.

    March 19, 2009 03:33 pm at 3:33 pm |
  8. Gene

    Geithner really dropped the ball on this one. Instead of a bonus loophole to protect against being sued for breach of contract.. there should've been a provision that any companies accepting bailout money would be relinquishing any bonuses as a condition of receiving the money.

    March 19, 2009 03:34 pm at 3:34 pm |
  9. Jennifer NY

    Everyone needs to calm down here. The media and now the politicians are blowing this thing way out of proportion. Mr. Geithner did what he could legally. I would like everyone to shut up and let him do his job.

    March 19, 2009 03:35 pm at 3:35 pm |
  10. Dan W.

    Secretary Geithner obviously does not share President Obama's vision of transparency. I understand his concern about the bonus contracts and lawsuits, but what he should have done is come out, and gone on every network, and told the public that they might have to put this loophole into the bill because of fear of lawsuits, and express outrage over it. The public would have been all over the AIG executives, Geither would have looked like a hero for exposing them, and this would never have happened! And, not communicating this to the President...just bad practice!

    March 19, 2009 03:35 pm at 3:35 pm |
  11. phoenix86

    Time to go. There is zero credibility left in this administration. If he doesn't believe the stimulus bill was rushed through congress than he is an idiot and shouldn't be in Treasury.

    As for Pelosi, Dodd and Frank rushing to punish individuals because Pelosi, Dodd and Frank screwed up, this is the most absurd abuse of power I have ever heard of. We are becoming a developing nation.

    March 19, 2009 03:35 pm at 3:35 pm |
  12. KC

    Talking out of the side of his mouth. I'm tired of the lies, deceit and audacity of this administration. They think Americans are stupid. They believe we don't care and we are going to let them get by with all this manipulation. What else do you think they have done that we haven't heard about? Seems to me that the Attorney General has been very quiet and "absent" lately. No telling what he is doing behind our backs. Egotists all of them. So was Hitler.

    March 19, 2009 03:36 pm at 3:36 pm |
  13. Mississippi Mike

    Wow, the incompetence in Washington right now is breathtaking. Is Geithner being Obama's useful idiot or is he just an idiot? What we are seeing here is one of the worst 60 days in American history and we have only one person to blame. (Hint: His middle initial isn't W.)

    March 19, 2009 03:36 pm at 3:36 pm |
  14. Lisa, MA

    This was a big mistake and one that he should not have done. He only has a few chances to show America his character.

    March 19, 2009 03:36 pm at 3:36 pm |
  15. ANGIE

    both dodd & this crook need to resign. President Obama can do better.

    March 19, 2009 03:36 pm at 3:36 pm |
  16. CAL

    No matter what is said and done here this man will be criticized. Most people won't hear that geitner told dodd to put in a loophole because if they didn't they would be sued, they only heard treasury knew about the bonuses before they went out. Think before judging people.

    This man has a lot on his plate, now add this to and the repubs are going to have a field day.

    March 19, 2009 03:37 pm at 3:37 pm |
  17. Home Educator in Texas

    The President's Treasury secretary, who received bipartisan confirmation despite nonpayment of some taxes, seems confused, not unlike a deer caught in the headlights. To make matters worse, the new secretary works as a one-man band. Of the 18 important undersecretary positions, none has been filled, with only three nominations currently under consideration. Two highly regarded undersecretary nominees abruptly withdrew their names, including one who many felt possessed significant expertise necessary to help the Treasury secretary explain and implement the administration's policies.

    March 19, 2009 03:37 pm at 3:37 pm |
  18. Steve (the real one)

    Why is it so hard for Geithner to admit it was him?:

    March 19, 2009 03:37 pm at 3:37 pm |
  19. Ken

    It does not matter if Geithner did or did not ask Dodd; Dodd should have said NO! Saying or asking it is one thing, but the action to do it is another!

    The real criminals here are the AIG Executives and their own GREED!

    March 19, 2009 03:37 pm at 3:37 pm |
  20. Matt in MN

    So if he takes full responsibility for this loop-hole, and given all the other issues, concerns he has already faced, in addition to the fact that he appears to be in so far over his head, he really should resign.

    March 19, 2009 03:37 pm at 3:37 pm |
  21. flybyshoeing

    I have no problem with this as the changed language still allows to go after the bonuses based on public interest. Why don't they just explain this stuff before it blows up in the media ? They are smarter than this.

    March 19, 2009 03:38 pm at 3:38 pm |
  22. Me

    Does Richard Dreyfuss think Geithner belongs in jail too? What about Dodd? What about all the other tax cheats in Obama's administration?

    Just curious.

    March 19, 2009 03:39 pm at 3:39 pm |
  23. Marcia, Marcia, Marcia in CA

    All of these dirty politicians that we continue to elect over and over again need to GO!

    March 19, 2009 03:39 pm at 3:39 pm |
  24. Objective thinking

    Obama is too popular for this to matter in a couple weeks. Even now, people are calling for the heads of everyone around Obama, but not Obama himself. People just refuse to think bad about him. Geithner, as Obama's chosen Sec. of Treasury, will end up keeping his position. If him breaking tax laws couldn't keep him out, then other execs at companies taking money in a distasteful but legal fashion won't keep him out.

    March 19, 2009 03:39 pm at 3:39 pm |
  25. RahmAxleRod SuperTroopers

    This is rediclous... I guess you shouldeve added a clause in your loophole: "if the public finds out, give back half"

    March 19, 2009 03:39 pm at 3:39 pm |
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