Senators and congressmen have 'AIG' on their faces

The word of the week is outrage.

But don't let the blustering, whining, finger-pointing politicians confuse you into thinking that the outrage is about $165 million in bonuses paid to AIG employees who were entitled to them contractually.

No, that is a mere drop of spit in the pool of saliva that slimed the nation's Capitol last week. Sure, paying bonuses of any kind seems extreme for a company that lost billions of dollars in value last year, and then asked taxpayers to prop it up. But that's just a distraction from the real problem.

Of course, you and I would never have agreed to pay for those bonuses if anyone had asked us, because we understand the value of a dollar, and we understand the value of our word.

But Congress on the other hand understands neither, and that, ladies and gentlemen, is the true outrage.

Yes, it was Congress which approved paying those bonuses when it authorized spending billions in bailout money for the insurance giant in February. So far AIG has received $180 billion of taxpayer money, which proves on the face of it that Congress does not understand the value of a dollar ? not your dollars at least.

But the hypocritical low point of this whole sad affair was when senator after senator, congressman after congressman, had the audacity to go before the American public and act like they were shocked (SHOCKED, I tell you!) that AIG would use any of that $180 billion to pay bonuses to its workers.

PUH-LEASE! Congress voted specifically to allow those bonuses, and everyone who voted for the stimulus bill without reading it should now have egg on their faces (or is that "AIG" on their faces?). That's where the so-called bonus loophole was inserted. You remember how we were told that it was vital to have a vote on that stimulus bill right away? Republicans tried to get the Democratic leadership to allow 48 hours before the vote so they could study the 1,071 pages of handouts, but that was strictly forbidden. So the bonus loophole and hundreds of other questionable provisions were passed sight unseen.

And now that the public has found out about the bonuses, suddenly nobody remembers anything about how that loophole language even got into the bill. Uh huh. Yeah right. Probably some cobbler's elves forced out of work by the recession snuck into the Capitol at midnight and hammered together the provision while the senators were at home sleeping like innocent angels.

Sen. Chris Dodd, D-Conn., certainly seemed pretty adamant about his innocence on Wednesday when he said he did nothing to protect or preserve AIG's bonus plan, telling CNN that "when that language left the Senate that I wrote, that [bonus protection] was not included."

But a couple of hours later (probably after he had looked up the word "dissimulate" at Thesaurus.com) he had a change of heart and told CNN that he (or his staff of cobbler's elves' had indeed inserted the loophole into the bill, but it was apparently all because someone at the Treasury Department (perhaps that devil Tim Geithner) made him do it.

Of course, that was not the only change of heart that Sen. Dodd had this week. He also decided it was time to return the $103,100 in campaign donations he had received from AIG execs during the 2008 election cycle. Yeah, that's right. The guy who they call "The senator from AIG" finally saw the light about taking money from a corporation with his left hand while he was giving it away to the same folks with his right hand.

Can anyone say "conflict of interest"?

And it wasn't just Dodd with his hand in the cookie jar. Sure, he was the No. 1 recipient of AIG money last year, but President Obama was close behind with $101,000, and Sen. John McCain, R-Ariz., got close to $60,000. Even Montana's own Sen. Max Baucus, running a campaign against a guy with a total war chest of something like $5,000, got contributions from AIG totaling almost $25,000.

I know, I know. That's just the way business is done in Washington. You don't have to tell me. But what I do want someone to tell me is when someone will have the guts to change the way things are done in Washington. President Obama, are you listening? Max, are you listening?

This is the change I will believe in: Take all the money you want from anybody you want, but when they are coming to the federal government for a handout, tell the public that you have a personal financial relationship with the company and won't be able to vote to help prop them up with taxpayer dollars because it would be grossly inappropriate.

Of course, that will never happen.

But couldn't the senators and congressmen, and yes even the president, be at least a bit more forthcoming about their own responsibility for the mess we are in?

Instead, the demagogues on Capitol Hill have taken a holier-than-thou approach to AIG which reeks of hypocrisy. Sen. Charles Grassley, R-Iowa, was probably the worst offender (other than Dodd, who is in a class by himself) when he attacked the executives at AIG:

"I suggest, you know, obviously, maybe they ought to be removed," Grassley said Monday. "But I would suggest the first thing that would make me feel a little bit better toward them [is' if they'd follow the Japanese example and come before the American people and take that deep bow and say 'I'm sorry,' and then either do one of two things: resign or go commit suicide."

Oh wait! Sen. Grassley used the public equivalent of that legislative gimmick where congressmen request "unanimous consent to revise and extend" their comments. Based upon further reflection, it turns out that when the senator said the executives should "commit suicide," what he really meant to say was that they should "make a formal public apology."

Uh huh. Sounds like somebody ought to make a formal public apology, but I am nominating Sen. Grassley.

During a hearing that featured AIG's current CEO, Ed Liddy, one congressman after another lampooned Liddy and talked about how horrible the folks at AIG are. Forget about the fact that Liddy is working at the urgent request of Uncle Sam to resolve one of the worse economic crises in modern times! Forget the fact that he is slaving away for the princely sum of $1 a year. Forget the fact that he isn't the guy who OK'd the bonuses in the first place. Forget all that and just look for a convenient scapegoat, because that's all Congress wants you to see.

But Ed Liddy isn't the problem; Congress is. So please don't buy it when Rep. Demagogue shakes his fist and sputters about how outraged he is! He knows more than he is saying, and part of what he knows is that these horrible folks at AIG are not horrible because they took bonuses that they were entitled to by contract; they are horrible because they bankrupted a perfectly good company through an outrageous Ponzi scheme known as "credit derivatives."

What's even more horrible is that the Treasury Department and the Federal Reserve decided to bail out AIG because they knew how explosive those credit derivatives were, and yet they failed to tell the American public. What's also horrible is that Congress knows they did the right thing by letting AIG pay those bonuses in the first place. Connecticut law, where AIG is based, would have required a double penalty if the company had defaulted on the bonuses, so it was really just simple math as well as Contract Law 101. Pay your damn bills, Congress! You bought AIG with taxpayer money, so that means you bought the assets AND the obligations! Introduction to Business 101.

But now Congress has decided to make matters worse by punishing the workers at AIG who got the bonuses that Congress guaranteed they would get in the first place. So on Thursday, the House of Representatives voted to tax the AIG bonuses at 90 percent. Talk about an outrage!

Even liberals who have studied the U.S. Constitution have had to admit that this bill is an unconstitutional "bill of attainder" or "ex post facto" law, both of which are forbidden by Article I, Section 9, of the Constitution. A bill of attainder is a law that targets a specific group of people for punishment, just as the AIG execs are being explicitly targeted here. "Ex post facto" means literally that you cannot change the law "after the fact," but that is exactly what Congress intends to do by telling the AIG employees they cannot have the money they earned legally and with Congress' consent.

What does it say about our Congress when they so nonchalantly vote for unconstitutional bills? Even Rep. Denny Rehberg, R-Montana, got suckered into voting for this one, and he should have known better. Rehberg valiantly voted against all the bailout bills because he thought they were an inappropriate use of taxpayer money, but in this case he caved in and voted against the Constitution.

I know, I know ? my liberal friends complain that it's too hard for poor legislators to know for sure what is and what isn't constitutional. Let the courts decide, they holler! But what about the damned inconvenient oath of office we ask our public officials to swear to? What about these words that members of Congress and Cabinet officials must recite in a solemn vow before they take office:

"I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God."

What about defending the Constitution? It's about time somebody tried.

And by somebody I mean you. Get busy calling your representatives in Washington, and get ready to take to the streets. It was Thomas Jefferson who warned us, "What country can preserve its liberties, if its rulers are not warned from time to time that this people preserve the spirit of resistance?"

In Northwest Montana, you can exercise your spirit of resistance on April 4 when a "Tea Party" is held at Depot Park in Kalispell from noon to 2 p.m. Remember the people are guaranteed the right of assembly by the Constitution, and if we don't want to lose that right too, we had better start exercising it. Bring a sign expressing your thoughts about the deficit, the bailouts and the boondoggles of the past six months. Contact Susan at 837-6721 for more information, or just show up.

n Frank Miele is managing editor of the Daily Inter Lake and writes a weekly column. E-mail responses may be sent to edit@dailyinterlake.com