Was Dodd in Cahoots With AIG?


The Washington Times says it has damning new information about the relationship between AIG and Senator Chris Dodd:

As Democrats prepared to take control of Congress after the 2006 elections, a top boss at the insurance giant American International Group Inc. told colleagues that Sen. Christopher J. Dodd was seeking re-election donations and he implored company executives and their spouses to give.

I understand why this provocative, but I'm not sure why it's important. Sure, you can be angry about the influence corporations wield in American elections (Ralph Nader has made a second career out of it). But that anger shouldn't apply uniquely to Chris Dodd. There is nothing illegal about soliciting individual campaign donations. And, more importantly, there is no evidence that Dodd did anything in exchange for these campaign donations.

Or is there? The Washington Times says there is evidence that Dodd helped AIG: "He acknowledged that he slipped a provision into legislation in February that authorized the bonuses, but said the Treasury Department asked him to do it."

But I can't get myself worked up about this, for three reasons. First, the provision is question didn't "authorize" the AIG bonuses, and it's lazy phrasing to say it did. The provision in question didn't "authorize" anything. And it certainly didn't apply uniquely to AIG. The provision just limited the compensation restrictions in the stimulus bill to contracts finalized after February 11 2009. (And that date wasn't chosen because it was convenient for the fat cats at AIG -- it just happened to be the date that Congress finished its negotiations on the stimulus.) If there's evidence that this was inserted to protect AIG, I haven't seen it.

Second, there's the small matter that this provision was a portion a larger addition to the bill that, you know, capped executive compensation. And these compensation restrictions were inserted by Dodd. It seems strange to use a small (and quite reasonable, IMHO) limitation on the compensation restrictions -- something that corporate interests obviously don't want -- as evidence that Dodd is a slave to corporate interests. If that were the case, why would he cap compenation at all?

Third, there's Dodd's defense: Treasury asked him to introduce the February 11th limitation. Is this true or not? That would be a more useful place to start than the question of whether some AIG executives wanted to give Dodd money. All that proves is AIG execs had money to spare.

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.
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