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March 19th, 2009

Dodd Admits Involvement in Bonus Changes

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Senator Chris Dodd admitted that he was in fact involved in changing the language to the final version of the stimulus bill that some say protected AIG’s controversial bonuses. Without naming names, Dodd said yesterday that Treasury officials asked him to modify the bill to cap executive bonuses:

On Tuesday, Dodd said he agreed to makes changes in the final version of the federal stimulus bill. This represented an about-face in his explanation, only one day after he said that he was not a member of the conference committee that crafted the final compromise bill and pointed out the exception had not been in the bill as he drafted it.

But late Wednesday, Dodd admitted in a live television interview with CNN he’d been involved in the change.

“I agreed reluctantly,” Dodd said. “I was changing the amendment because others were insistent.”

The final version of the bill included an enforcement of salary restrictions beginning February 11.

The maze of controversy surrounding  the Democratic Senator’s admissions this week has many Republicans questioning  his political credibility:

“It’s apparent that Senator Dodd – on a whole host of issues – has a lot of explaining to do,” said State House Republican leader Lawrence Cafero. “People are having a credibility problem here. … For a long time, there was an impression that Chris Dodd was an institution and could be there [in the U.S. Senate] as long as he wanted to. Once you believe that, that’s when the wheels come off.”

Dodd has remained fervent that despite his involved in changing the legislation’s final language, it had nothing to do with AIG:

Still, he said in a statement, “Reports that I changed my position on this issue are simply untrue. I answered a question by CNN last night regarding whether or not a specific date was aimed at protecting AIG. When I saw that my comments had been misconstrued, I felt it was important to set the record straight – that this had nothing to do with AIG.”

Jennifer Rubin of CommentaryMagazine.com seems to know the only way we’ll get to the bottom of this:

The ball is now in Treasury’s court once again. It seems testimony under oath is the only way this will all come out.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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