The Daily Bail

"Of Bonuses, Lies and Videotape"

The AIG bonus outrage is quickly becoming a nightmare for the Obama administration as several new reports now call into question the truthfulness of statements made by administration officials earlier this week.  The issue has now advanced to the who-knew-what-and-when stage, which is generally a prelude to a forced resignation.  The obfuscation and dissembling from members of the Obama administration support the notion of a cover-up.  We reveal the details below.

TIME is reporting that Treasury officials knew of bonus retention payments to be made to AIG much earlier than previously claimed.  The implication is that Treasury Secretary Tim Geithner perjured himself this week when he testified under oath to Congress that he first learned of AIG bonus payments on March 10th.  Details from Time:

Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG's impending $160 million bonus payments to members of its troubled financial products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28.  That is 10 days before Treasury staffers say they first learned "full details" of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.

"Treasury staff was informed about the new bonuses in a Feb. 28 memo that the March 15 [bonus-payment] date was upcoming," a Federal Reserve source tells TIME.  A Treasury Department source, speaking on background, confirmed the e-mail memo and its contents, saying, "Everybody knew that [AIG] had a retention issue."

The New York Fed even went so far as to warn Treasury staffers that the bonuses were a hot-button issue.  In the past, the memo says, the "retention," or bonus, issue has drawn the attention of both Capitol Hill staffers and the media.  The New York Federal Reserve forwarded further details of the plan to Treasury on March 5 and even more specifics in a March 9 memo, which Treasury officials had previously said was their first detailed warning of the bonus trouble.

Not susrprisingly, the anonymous Treasury source attempts to protect Secretary Geithner by blaming career Treasury staffers for not informing the Secretary promptly.  This argument is completely and demonstrably false.  Has the Obama administration forgotten about about news archives.

Several capable journalists, thankfully, have not. Jane Hamsher in an article on firedoglake, has documented the media coverage from 6 weeks ago that shows unequivocally that President Obama along with Lawrence Summers and Secretary Geithner pressured Senator Chris Dodd to alter his ammendment to the stimulus bill that would have made all future bonus payments made to executives at bailed-out companies subject to strict limits. 

Obama, Geithner and Summers were concerned about the effect Dodd's ammendment would have upon previously negotiated bonus contracts at AIG.  As Reuters reports tonight, it was only after repeated demands from the White House, that Sen. Dodd agreed to alter the language of his rider so that it would exclusively apply to compensation agreements made after Feb. 11th.

The facts as presented by TIME and Reuters, and confirmed by news archives from mid-February, shine an uncomfortable light on a new administration still struggling to find its groove.  And they reveal a tendency that will serve none of us well.  Sadly, that President Obama is willing to lie to the American people, and that his economic minions, Geithner and Summers and Robert Gibbs are also prevaricators of the highest order.

Glenn Greenwald writes in The Dishonest 'Blame Dodd' Scheme:

There is a major push underway -- engineered by Obama's Treasury officials, enabled by a mindless media, and amplified by the right-wing press -- to blame Chris Dodd for the AIG bonus payments.  That would be perfectly fine if it were true.  But it's completely false, and the scheme to heap the blame on him for the AIG bonus payments is based on demonstrable falsehoods.

There is outstanding detail in Greenwald's and Hamsher's accounts that readers need to see, but for our purposes, two salient facts emerge.  First, that in painful Slick Willy style, the Obama White House is willing to sacrifice the truth and destroy a fellow Democrat (Dodd) in order to preserve it's populist image.  And more importantly that Obama, Geithner and Summers all knew about the AIG retention bonuses long before February 28th as postulated by TIME above, and certainly before March 10th, as Geithner testified to Congress under oath earlier this week.  The news archives quoted by both authors demonstrate conclusively that President Obama, Geithner and Summers were aware in mid-Februrary of the upcoming AIG bonuses, and that they wanted to make sure those payouts were not threatened by Dodd's ammendment.

This is not surprising, as Geithner was the architect, along with Paulson, Bernanke and possibly Lloyd Blankfein, of the original AIG bailout, and so the claim that Geithner was unaware of the pending bonus payments would seem disingenuous on it's face. When the evidence from the February archives is added, disingenuous quickly morphs into lies.

Further adding to Obama's difficulties, this afternoon Senator Dodd himself confirmed to Wolf Blitzer of CNN that he modified his ammendment to the stimulus bill in order to protect previously agreed upon compensation contracts (read AIG bonus payments) only after repeated requests of un-named Treasury officials.  

After consideration of the work of Greenwald, Hamsher, TIME, Reuters and the statement from Senator Dodd, there is no longer a question that, among others, these un-named officials included Geithner, Summers and President Obama.

I expect these revelations will gain traction quickly within the halls of Congress where members, desperate to appear appropriately outraged, will seize upon the reports and demand the sacrifice of a high-level administration official.  With his bank bailout mis-steps and his willful tax cheating still fresh in Congressional memory, the obvious candidate for expulsion is TG.

I have seen this movie several times before and it generally ends the same (exception Rumsfield). So I am confident in saying tonight, goodbye and good riddance to Treasury Secretary Tim Geithner.

It has been nice knowing you and please allow the door to smack you in the ass on your way out.

Geithner Knew Everything    Jane Hamsher

Treasury Attempts To Blame Dodd For AIG Bonuses   Jane Hamsher

Who Asked Dodd to Defang Anti-Bonus Provision?

The Dishonest Blame Dodd Scheme from The White House     Glenn Greenwald

Obama officials sought to keep AIG Bonuses    Reuters

Time Magazine on Geithner

Update on Thursday, March 19, 2009 at 6:34AM by DailyBail

Updated with additional commentary and several new links.