CNN's Bash falsely claims recovery bill language required AIG bonuses “to stay in place”

Written by Adam Shah

Published

On The Situation Room, Dana Bash falsely claimed that “a clause” of the economic recovery act “effectively made sure that the contracts that were in place for the past couple of years with companies like AIG -- why those had to stay in place and why AIG had to give the bonuses.” In fact, the relevant provision in the recovery bill actually restricted the ability of companies receiving funds under the act to award bonuses in the future; it did not mandate that AIG -- or any other companies -- pay bonuses.

On the March 18 edition of CNN's The Situation Room, CNN senior congressional correspondent Dana Bash falsely claimed that “a clause” of the American Recovery and Reinvestment Act “effectively made sure that the contracts that were in place for the past couple of years with companies like AIG -- why those had to stay in place and why AIG had to give the bonuses.” In fact, the economic recovery bill did not require that compensation contracts entered into by companies like AIG “had to stay in place,” nor did the bill require AIG “to give the bonuses.”

Rather, as Media Matters for America has documented, the relevant provision in the recovery bill , which was based on an amendment by Sen. Chris Dodd (D-CT), actually restricted the ability of companies receiving funds under the act to award bonuses in the future; it did not mandate that AIG -- or any other companies -- pay bonuses.

From the March 18 edition of CNN's The Situation Room:

ANNOUNCER: This is CNN breaking news.

WOLF BLITZER (host): Let's get right back to the AIG bonus mystery, and it's a huge mystery. Before those checks were even written, $165 million, someone in Congress inserted a huge loophole allowing the bonuses to go forward. So far, no one is owning up, but we have some new developments. Let's go to our senior congressional correspondent Dana Bash. Dana, what's happening?

BASH: Well, Wolf, we've been talking about this mystery of why, in effect, AIG was able to get these bonuses and why this happened during a stimulus debate. Actually, the stimulus bill. Why there was a clause put in it effectively made sure that the contracts that were in place for the past couple of years with companies like AIG -- why those had to stay in place and why AIG had to give the bonuses.

Well, here's what we have learned. We have learned from a Treasury official I spoke to, who did not want to talk on the record, but was authorized to speak to me, what they said is that the Obama administration, the Treasury Department did actually raise the concerns and effectively pushed to have that clause put into this. Why? They say it is because they were concerned that the Treasury Department and the government would be sued if they prohibited companies like AIG from giving bonuses because the contract was already in place.