Last week, lawmakers dashed to the podiums of Capitol Hill to condemn AIG and the rest of those bonus-loving scoundrels on Wall Street. But not long before that, some of those same members had been dashing to fundraisers with the very financial bogeymen they were now skewering. Indeed, the line between friend and target is a fine one in Washington, and often the line moves from month to month. Now that the AIG bonus scandal has started to wane--many of the payouts have been returned, and it appears the House legislation designed to tax away the bonuses won’t be taken up by the Senate until mid-April, if at all--it’s time to ask whether the most indignant lawmakers (Democrats, mostly) stand to pay a political price. Here's a look at those who've bashed AIG and Wall Street with one hand after taking with the other.
Representative Charles Rangel
The Harlem Democrat, who’s had a long relationship with AIG, initially tried to cool his pitchfork-wielding colleagues on the bonus issue, cautioning that taxes shouldn’t be used as a “political weapon.” Later, he seemed to do an about-face when he introduced the tax bill on the House floor.
Money Quote: “Dreams have been shattered and homes have been lost because a small group of executives were motivated by greed rather than preserving a system that America and the world depend upon.”
Money Trail: Rangel may have decided he needed a little distance between himself and the insurance giant. As The New York Times has reported, Rangel was pursuing AIG for a $10 million donation toward a school named in his honor as recently as last year. And since 1989 he’s received more than $50,000 in campaign money from the company, according to the Center for Responsive Politics. (As with the other campaign figures quoted here, the money came from the company’s political action committee and its employees, not from the company itself.). Three of Rangel’s five biggest donors these days are Citigroup, Credit Suisse, and JP Morgan Chase.
Senator Chris Dodd
After it was revealed he played a role in the legislative changes that authorized the AIG bonuses, the Connecticut Democrat spent the latter half of last week on the defensive. In a press release clarifying his position, Dodd cast himself as a staunch crusader against fat bonuses and golden parachutes.
Money quote: “I'm the one who has led the fight against excessive executive compensation, often over the objections of many.”
Money trail: During the 2008 election cycle, Dodd was the largest recipient of AIG campaign money, with a haul of $103,100.
Representative Carolyn Maloney
A lot of lawmakers chose to dance around the issue of whether rescinding the AIG bonuses would breach legal contracts or not. But this Manhattan Democrat didn’t seem to mind sending a chill through Wall Street. "They say you can’t change a contract. We change contracts all the time," she told David Gregory on "The Today Show."
Money quote: “The casino is closed.”
Money trail: Maloney has taken in about $750,000 from securities and investment firms since being elected in 1992, more than from any other sector. Among her regulars: Citibank, JP Morgan, Goldman Sachs, and Bank of America.
Senator Tom Harkin
Along with ten other Democrats, the Iowa senator signed onto a letter to AIG CEO Edward Liddy telling him his firm had to cough up the bonuses or face losing them entirely through "steep" tax measures.
Money Quote: “Some of these financial institutions have no end to their greed and outrageous expectations of what they deserve,” Harkin seethed in a press release last week.
Money trail: Though Harkin leans mostly on lawyers and the health care industry for campaign money, Goldman and Citigroup are reliably among his top donors. The financial sector overall threw a princely $369,000 to Harkin’s cause during the last six years.
Senator Max Baucus
The Democratic senator from Montana--and chairman of the finance committee--was among the first to call for a massive tax on bonuses paid to employees of firms receiving bailout money. He’s been fiery on the subject, though not quite as fiery as the proposal’s other early backer, Republican Senator Chuck “resign or go commit suicide” Grassley.
Money Quote: “They are just in their little cocoon,” Baucus sneered at the bailed-out firms in general. “What are these people thinking?”
Money Trail: They’re probably thinking they shouldn’t have given Baucus so much loot. From 2005 to 2006, AIG was Baucus’s top donor, coughing up nearly $60,000; JP Morgan wasn’t far behind at $58,000. During the last six years, Baucus has received more of his money from securities and investment firms--over $830,000--than from any other industry.
Senator Charles Schumer
No one crowed as loudly on the floor as the senator from New York (Grassley’s suggestion of suicide came during an interview with an Iowa radio station). Schumer declared that AIG’s “Alice in Wonderland business practices” call for a tax of 100 percent on the largest bonuses.
Money quote: “Let the recipients of these large and unseemly bonuses be warned: If you don’t return it on your own, we’ll do it for you.”
Money trail: Schumer’s boosters during the last Senate cycle are a who’s who of the day’s financial personae non gratae: Citigroup, Goldman, Morgan Stanley, Lehman, JP Morgan Chase, and Merrill Lynch. Goldman, his greatest contributor over the last two decades--the firm’s sources have given Schumer more than $450,000 since 1989--received $13 billion in bailout money as one of AIG’s counterparties.
Dave Jamieson is a freelance writer based in Washington, D.C.
By Dave Jamieson