Yet, he makes the point that the Obama administration didn't use the power retroactively, but has chosen to use it's power on any further funding. And he notes that the bonuses are a *relatively* small portion of those funds, referring to the banks that got much of the October bailout funding, as revealed this weekend. ~ pintoReferring to the original bailout Congress passed
in October, Sherman told me:
"We had a provision in there that said Treasury was supposed to establish, by regulation, standards for executive compensation. We required that to be done -- had it been done, it would have been binding, whether
these contracts had been signed earlier. It's entirely within the power of the federal government to have contracts modified . Nixon had contracts modified by the federal government. We gave a similar power to Treasury."
Sherman voted against the bailout, he explained, because he didn't believe that Treasury would use the power given to it by Congress. As it turned out, the department ultimately exercised its executive compensation powers last month, but the final regulations were riddled with loopholes -- and only applied to companies receiving "extraordinary" assistance from the government in the future, a standard that no company has officially met so far.
<snip>
But Sherman also counseled wariness, as the nation gives in to expend anger over AIG's bonuses and largely ignores the weekend disclosure of the large banks who benefited because of their status as AIG counterparties in credit default swaps deals.
"Arguably, this thing with bonuses is a red herring they're throwing at us did with the $170 billion" they've received from the U.S. government, Sherman said. "The bonuses are chump change compared with what's going to the uninsured counterparties."
http://tpmdc.talkingpointsmemo.com/2009/03/rep-sherman-treasury-could-easily-get-back-those-aig-bonuses.php?ref=fp1