Dodd is really exposed on the AIG bonuses.

Dodd: Administration sought bonus limit revision
By JIM KUHNHENN, AP
3 hours ago

WASHINGTON — For a while, the disappearance of an executive bonus restriction from last month’s economic stimulus looked like sleight of hand worthy of a Las Vegas stage. No one could explain how the provision faded into thin air. On Wednesday, Sen. Chris Dodd, D-Conn., acknowledged that his staff agreed to dilute the executive pay provision that would have applied retroactively to recipients of federal aid.

Dodd, the chairman of the Senate Banking Committee, told CNN that the request came from Obama administration officials whom he did not identify.

The provision was the subject of new attention this week because, had it survived, it would have prevented the American International Group Inc. from granting $165 million in bonuses to employees of its financial products division.

While the House and Senate reconciled their different stimulus bills last month, the Treasury Department expressed concern with a Senate restriction on bonuses, noting that if it applied to existing compensation contracts it could face a legal challenge.

“The alternative was losing, in my view, the entire section on executive excessive compensation,” Dodd told CNN. “Given a choice, this is not an uncommon occurrence here, I agreed to a modification in the legislation, reluctantly.”

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