The bonus loophole mystery has been solved. Banking Committee Chairman Sen. Chris Dodd added language to the stimulus bill that allowed the AIG bonuses to stand—at the request of the White House, he told CNN. The Connecticut Democrat said he did so reluctantly at the insistence of unnamed Obama administration officials, who worried about lawsuits if they tried to dodge employee contracts.
"The administration had expressed reservations. They asked for modifications," Dodd said. When the stimulus measure initially moved through the Senate, Dodd backed an amendment calling for strict limits on such bonuses. But the amendment was reversed in negotiations with the House. The continuing furor over AIG bonuses raised the question of who was responsible. They “seemed like innocent modifications,” said Dodd.