CNN's Castellanos falsely claimed Dems “gave” bonuses to AIG execs

Written by Jeremy Holden

Published

Advancing a false Republican accusation, CNN contributor Alex Castellanos falsely claimed that Democrats “gave” AIG executives bonuses. In fact, the economic recovery bill did not create the right for AIG -- or any company -- to pay bonuses. Rather, AIG reportedly disclosed that it had entered into agreements to pay these bonuses more than a year ago, and the special inspector for the TARP program has testified that the Bush administration Treasury Department knew about the AIG bonus contracts and did not insist on their abrogation as a condition of AIG's receiving bailout money.

During the March 23 edition of CNN's No Bias, No Bull, CNN contributor Alex Castellanos falsely claimed that Democrats “gave” AIG executives bonuses, advancing the false Republican accusation that by passing the American Recovery and Reinvestment Act, Democrats created the right for AIG to pay bonuses. Castellanos claimed of AIG bonuses: "[I]t does have a political impact going into the next election. These Democrats out there are -- the outrage that they're trying to, I think, feign, is a real problem. How, you know -- 'How dare these AIG execs take the bonuses we gave them?' That's going to be hard to defend." He also stated: "[I]t was Democrats who put it in there -- [Sen.] Chris Dodd [D-CT]. And it's Democrats who control the Congress." In fact, as Media Matters for America documented, the recovery bill did not create the right for AIG -- or any company -- to pay bonuses.

Rather, AIG reportedly disclosed that it had entered into agreements to pay these bonuses more than a year ago. As Media Matters has also noted, Neil Barofsky, a Bush-appointed special inspector general for the Troubled Asset Relief Program (TARP), stated in March 19 congressional testimony that the Bush administration Treasury Department knew about the AIG bonus contracts and did not insist on their abrogation as a condition of AIG's receiving bailout money. Further, the relevant provision in the recovery act, which was based on an amendment sponsored by Dodd, actually restricted the ability of companies receiving TARP money to award bonuses in the future. In the absence of the recovery bill, AIG's ability to pay the bonuses would not have been limited. Indeed, if Republicans had succeeded in defeating the bill, the clause restricting the ability of troubled companies to award bonuses in the future would not have been enacted at the time.

Host Campbell Brown later stated that the recovery bill contained a “last-minute exemption clearing the way for bailed out companies like AIG to pay out big bonuses” without noting Barofsky's testimony about the Bush administration's role in allowing the AIG bonuses.

From the March 23 edition of CNN's Campbell Brown: No Bias, No Bull:

BROWN: And, Alex, with the news tonight of these 15 out of 20 top earners at AIG giving their bonuses back, does that dampen sort of this populist rage at all, or has the damage been done in a way?

CASTELLANOS: I think that, you know, 15 of the 20 criminals gave the money back doesn't lessen the anger at the crime. You know, this is a small amount of money relative to the larger picture, but a few hundred million dollars is still big money to most of us. And also, you know, it's the handle on the coffee cup. There's a lot of steaming hot resentment out there -- it's hard to understand all those zeroes -- but it's easy to understand the handle, the little bit you can see with these executives.

And it does have a political impact going into the next election. These Democrats out there are -- the outrage that they're trying to, I think, feign, is a real problem. How, you know -- “How dare these AIG execs take the bonuses we gave them?”

BROWN: Oh, OK. But Alex --

CASTELLANOS: That's going to be hard to defend.

BROWN: Alex, it wasn't -- in fairness, it was not just Democrats who were screaming and yelling about this on Capitol Hill by any means.

CASTELLANOS: No, but it was Democrats --

BROWN: This was very, very much bipartisan rage.

CASTELLANOS: But it was Democrats who put it in there -- Chris Dodd. And it's Democrats who control the Congress. And look, the Democrats won the last election. Congratulations, it's your problem now. And next election, I think, is going to be a brake pedal election. I think America is seeing a ton of spending, we just spent a trillion dollars today. We're seeing Democrats bailing out Wall Street. We're seeing big bonuses. I think the next election's going to be a brake pedal election. We're going to send the new guys to watch the old guys.

[...]

BROWN: But then there is Congress and this, the stimulus bill. How fast could you get through this? According to the nonpartisan Sunlight Foundation, lawmakers had just 13 hours to read the 1,100 pages of material that would cost the American taxpayers $787 billion. That is less than a minute and a half per page, with no time for bathroom breaks.

No wonder so many of our lawmakers didn't seem to notice that last-minute exemption clearing the way for bailed out companies like AIG to pay out big bonuses.