So — in the end, all compensation limits only applied to contracts written after February 11, at the specific request of Timothy Geithner, and AIG was able to pay out $286 million in bonuses on Sunday.
It’s impossible to know how many of those bonuses would have been covered by Dodd’s original language without examining the individual contracts. What is certain, however, is that the loophole regarding “retroactivity” which facilitated the payout of the bonuses that AIG cited in their white paper, was something that Treasury specifically lobbied for.
Also worth noting that this probably isn’t the final word — weren’t Sen. Olympia Snow and Sen. Ron Wyden pushing harder than anyone for regulating bonuses? — and of course, there’s some disagreement as to why Treasury objected to Dodd’s amendment.
I like this bit from Glenn Reynolds:
I GUESS IT’S TOO BAD NOBODY READ IT BEFORE IT PASSED, THEN: “>The Stimulus Bill Explicitly Guarantees Contractual Bonuses Executed Before February 11. Yeah, I know, I already mentioned this. But it’s a point worth making again ” they rushed this stinker through, and now it’s biting them on the ass. Good.
Gee, maybe members of Congress should Read the Bill…