WASHINGTON – Senator Chuck Grassley has asked the Treasury Secretary to account for the government’s delay in meeting the mandate passed by Congress, in February 2009, that all participants in the government bailout of the financial sector meet appropriate standards for executive compensation.
Taxpayers have seen recipients of Troubled Asset Relief Program, or TARP, dollars, including AIG, give out multi-million dollar bonuses and severance payments. The administration’s Special Master for Compensation, the high-level official responsible for preventing unjustified compensation in companies who relied on bailout dollars to stay afloat, has said that his hands are tied because of grandfathering.
However, Grassley said, “In February 2009, Congress passed a mandate that participants in the Troubled Asset Relief Program, the government bailout of the financial sector, meet appropriate standards for executive compensation. The legislation included a very controversial insert that protected retention bonuses. Despite the outcry over that carve-out when it was revealed, the Treasury Department wrote regulations four months later that went even further and also grandfathered multi-million dollar severance payments. The effect of what’s been done by the Treasury Department is to protect rather than prohibit more forms of executive compensation.”
The senator said he will continue to press the Treasury Department to fulfill the congressional mandate from the February 2009 legislation that all TARP recipients meet appropriate standards for executive compensation.
Click here to see Grassley’s letter to Treasury Secretary Timothy Geithner.
Click here to read a Dow-Jones news report about Grassley’s inquiry.