Guest: Bob Shrum, David Corn, Pat Buchanan, Howard Fineman, Brian Shactman, Sen. Chris Dodd, Rep. Gary Ackerman, Rep. Kevin McCarthy
CHRIS MATTHEWS, HOST: Nobody‘s late for an execution.
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews. Leading off tonight: On the skillet. It was one of those classic Washington scenes, the CEO who, fairly or not, has become the public face of a crisis facing TV cameras and members of Congress who sense an opportunity. Edward Liddy, the dollar-a-year head of AIG, was in the witness chair today on Capitol Hill.
(BEGIN VIDEO CLIP)
EDWARD LIDDY, AIG CEO: It was distasteful to have to make these payments, but we concluded that the risks to the company, and therefore, the financial system and the economy, were unacceptably high.
(END VIDEO CLIP)
MATTHEWS: Well, the battle of blame rages in full. Democrats are blaming Wall Street. Republicans are blaming President Obama and Treasury Secretary Geithner. And the true believers are blaming anyone and everyone who backed the bail-out in the first place. In a minute, we‘ll be joined by two members of the congressional committee that interrogated Liddy.
Also: Who knew and when? When did he know it? I‘m talking about those big AIG bonuses again. President Obama was asked whether he wished he had learned about the bonuses sooner than he did. Here he is.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Rather than going to sort of the details of finding it out—ultimately, I‘m responsible. I‘m the president of the United States.
(END VIDEO CLIP)
MATTHEWS: But why not go into the details? And here‘s the mystery. People tried to stop those bonuses, even put an amendment together in the stimulus bill to stop them. Then somebody took that amendment out in House/Senate conference. Somebody got in that room and protected those AIG bonuses. And top congressional people aren‘t saying who it was, and we can‘t find out who made the deletion that would have stopped those bonuses.
Plus: Democratic senator Evan Bayh today declared that he‘s forming a so-called moderate Democrats working group of 15 senators, all Democrats, to work issues like the deficit and health care. So what‘s the point? Are they forming a new Democratic Party? Are they breaking away? Are they trimming? Are they trying to avoid responsibility for the big questions coming down the line? Is this a threat to President Obama, this breakaway group, or is it a slap in the face to Senate majority leader, the Democratic leader Harry Reid? We‘re going to find that out tonight.
And former President Bush refused to criticize President Obama in his first post-presidential speech for money yesterday and said his successor, quote, “deserves my silence.” Compare that to Dick Cheney, who bashed President Obama at every turn this week, two radically different approaches in today‘s “Politics Fix.”
And it‘s March madness, everybody knows. Time to fill in your brackets. President Obama has done so. Let‘s look at his sophisticated pick of the “final four” and eventual top college basketball team in the country. That‘s in the HARDBALL “Sideshow” tonight.
We begin with today‘s testimony by AIG CEO Edward Liddy with two members of the subcommittee that questioned Liddy today, U.S. congressman from New York Gary Ackerman, who‘s a Democrat, and U.S. congressman from California Kevin McCarthy, who‘s a Republican.
Mr. Ackerman, what is your view today of Liddy? Where‘s he stand after all the grilling?
REP. GARY ACKERMAN (D), NEW YORK: Well, I think he stood up pretty well. He‘s in a very, very tough spot. He got parachuted in. He has no stake in this. He gets no compensation. There‘s no up side if he fixes it, and he‘s taking a lot of heat. But he did stumble coming out of the starting gate with this bonus package, which was a huge mistake which has really helped to pique the public anger on this whole climate that we‘re in right now.
MATTHEWS: Now, he has asked the members of his team at AIG to give back 50 percent of the bonus money, and he said some have offered to give back 100. Does that satisfy you?
ACKERMAN: Well, if they give back the bonus money, you can‘t ask for more than that. And if they don‘t want to give it back, the thing that I asked him was that the company should give it back. It amounts to one twelfth of all of the money that‘s available to them from the U.S. taxpayers. Certainly, the taxpayers didn‘t intend this money to reward a bunch of bunglers who drove a company into the ground and then get rewarded for it.
MATTHEWS: Well, let me ask you this. Can they legally deny them the bonuses now that they were contracted for them, or does the government have to step in here and do something through legislation, taxation or litigation?
ACKERMAN: Well, the question on the legality of the government doing that is something that‘s a contention right now, Chris. But the point is, they should give it back on their own.
There are things that we can do. We‘ve not—they‘ve not drawn down billions and billions of dollars that are available to them. And if they don‘t do it in their own interest and for their own good to demonstrate that they get it, that they understand it, then we‘re not going to have the confidence in them, and we will find a very easy and quick way of making sure not all of the money is going to be released to them. That‘s not really what everybody wants.
MATTHEWS: Well, let‘s talk about money. Congressman McCarthy, you‘re a Republican. I want you to look at this list. We‘re going to read it to you. You don‘t have to see it. Chris Dodd got over $100,000 from AIG. Barack Obama got over $100,000 from AIG. John McCain got almost $60,000 from AIG. Hillary Clinton running for the presidency got almost $40,000. Max Baucus, the top Democrat on Finance, got $25,000. Joe Biden, the VP, got $20,000.
If you follow the money, money gets you access. I am suspicious that somebody from AIG working with somebody perhaps from Treasury or the White House got into that House/Senate conference and took out the language in the stimulus bill that would have deleted those bonuses. What do you know?
REP. KEVIN MCCARTHY ®, CALIFORNIA: Well, the one thing I‘d say, if you listened to the testimony today, you would even be more suspicious because the CEO said he had known of this, been working on this for three months. He said he talked to the Federal Reserve. If you read his testimony, every time he refers to the Federal Reserve, he refers to the Treasury, as well, as being part of the team. He said he met with them. He talked to them.
And remember where our secretary of Treasury was prior to this job. He was in the New York Fed, where they put in charge of putting this money out. There has been relationships going through. So I go back to the question, When did they know, who knew it, and who OKed it? And now they‘re trying to do a cover-up.
MATTHEWS: Well, you‘re suggesting—you‘re suggesting rather strongly, Congressman, that the Treasury under Geithner and under the leadership of the president knew about these bonuses and never said no to them. In fact, you‘re suggesting, (INAUDIBLE) in answering my question, that they protected these bonuses when we passed the stimulus bill.
MCCARTHY: Well, look at the facts. We got to go (INAUDIBLE) The CEO says they knew about it for three months, they were working on it for three months. It was coming due on March 15th. The stimulus got through, and what does the stimulus say? Even though you had a bipartisan amendment passed by Wyden and by Snowe that would have taken care of this, saying you could only get $100,000 bonus, you could not get more. But that got changed. No one knows who. No one can tell you who.
But if you read Baucus‘s—Senator—he said it got changed by Treasury staff and by staff. Now, if the CEO says he talks to the Fed and he talks to the Treasury and he asks them about this, it puts a lot of questions forward that I think people have to come before this committee and answer. And we should have the minutes. We should know.
The U.S. taxpayers owns 80 percent of this company. We have three board members that were put on with the bail-out. One of the individuals that got put on the trustees used to work at the New York Fed, work under Geithner. How much did he know and when did know it?
MATTHEWS: Mr. Ackerman, do you have any knowledge as to what happened in the conference, the House and the Senate, when they passed the stimulus bill to protect these bonuses?
ACKERMAN: I wasn‘t in the conference and have no knowledge of it whatsoever. But you know, the real focus, Chris, is, you know, $100,000 to a presidential campaign or a major Senate campaign, especially over years and years—and we don‘t know how far back that money accumulates...
MATTHEWS: No, it‘s 2008.
ACKERMAN: ... is nothing.
MATTHEWS: It‘s one cycle. It‘s one cycle.
ACKERMAN: OK, but it‘s still nothing. I mean, those people would have gotten—much preferred getting a bonus than a political contribution.
MCCARTHY: Well, Chris, that‘s $100,000 more than I got, so I got zero.
MATTHEWS: Well, I‘m just asking...
ACKERMAN: Yes, me, too.
MATTHEWS: ... are you serious—Congressman Ackerman, I got a lot of respect for you, but doors open when money is paid. You don‘t think they got access, AIG, to that conference with their money, is what you‘re saying.
ACKERMAN: Chris, I have no idea. I mean, it‘s an easy accusation to make. But you know, what we did do...
MATTHEWS: No, I have the money. I have the evidence. I have the contributions which were made. And we know from the testimony just then of Congressman McCarthy that somebody in that House/Senate conference removed that prohibition on these bonuses. Somebody acted to do it. Now, Chris Dodd, the senator from Connecticut, says it was some people in the conference and it was Treasury. You just heard observation—an accusation it was Treasury.
We keep hearing Treasury, Treasury, Treasury. Well, Treasury doesn‘t sit in the House/Senate conference. Members of the Senate and House sit there. Somebody approved that language being deleted in the conference, and I think it‘s a mystery story. And knowing Washington, Congressman Ackerman, you know somebody is going to find that out in the next 24 hours, who in that committee, in that conference committee did it?
ACKERMAN: You‘re absolutely right, somebody‘s going to find this out. Everybody‘s going to be looking into it. I think when they say Treasury, I think they mean it was done at the behest of Treasury, but Treasury certainly doesn‘t sit there and have an eraser that can take anything out of a bill. It had to be one of the members on the committee, if, indeed, that was done.
MATTHEWS: Yes.
ACKERMAN: We will find out, and Chris, you‘re going to know.
MATTHEWS: OK, here‘s President Obama, I think avoiding the subject here today. He talked about the past and the culture of greed and risk-taking he inherited. He talked about the need to reform. He didn‘t want to talk about this sort of chain of information about these bonuses in the last week. He didn‘t want to talk about when he knew or when his people knew. The president wants to dodge this issue a bit. We‘ll see if he can do it in these town meetings tonight. Here he is, however, this morning.
(BEGIN VIDEO CLIP)
OBAMA: I don‘t want to quell anger. I think people are right to be angry. I‘m angry. What I want us to do, though, is channel our anger in a constructive way, and the most important thing we can do right now is stabilize the financial system.
(END VIDEO CLIP)
MATTHEWS: Congressman McCarthy, and then Congressman Ackerman, do you want the names of the people who got the bonuses at AIG published?
MCCARTHY: That was asked today. I think, more importantly, let‘s get the names of who changed the conference, where you had a stimulus bill where no one can claim that something happened that was passed where the public couldn‘t even read it nor the congressional members. I think that is the structure of the American government failing.
MATTHEWS: OK.
MCCARTHY: I think we have to have...
MATTHEWS: Well, you‘re not answering me. Do you think those lists should be published?
MCCARTHY: Oh, I think they should. But first and foremost, I think it should be published to who changed it. Who knew it and who OKed it?
MATTHEWS: Well, we‘re working on that one. Let me ask you—
Congressman Ackerman, here is Edward Liddy, the head of—the CEO of AIG, saying if these names are published, there‘s a certain threat aspect out there, a danger aspect to them and their families. Here he is.
(BEGIN VIDEO CLIP)
LIDDY: I‘m just really concerned about the safety of our people. So let me just read two things to you. “All the executives and their families should be executed with piano wire around their necks. My greatest hope. If the government can‘t do this properly, we, the people will take it in our own hands and see that justice is done. I‘m looking for all the CEOs‘ names, kids, where they live, et cetera.”
(END VIDEO CLIP)
MATTHEWS: I think somebody saw “Valkyrie” recently. I don‘t know why somebody would talk about piano wire. Congressman Ackerman, what do you make of that threat?
ACKERMAN: Well, there‘s crazy people out there, and you know, you can‘t just dismiss it and those letters have to be investigated. But we all get letters like that from time to time. The fact of the matter is that these people were paid—taxpayers own 80 percent of the company, which just about makes all of them public employees right now, subject to disclosure of money and bonuses and pay that they‘re getting.
Nobody wants to humiliate people to that extent. If they want to avoid that, just give back the money. They weren‘t entitled to it. This is taxpayer money, not entitled to reward people who themselves played the card of economic terrorists, threatening to bring down a company and tell trade secrets that were probably worthless to begin with and sell them to a competitive company in an argument—in a climate where they probably can‘t even get a job with another company right now.
MATTHEWS: Unbelievable. You‘re saying we paid that money, taxpayer money, to people to retain them at AIG because they were threatening to take the secrets and use them against AIG.
ACKERMAN: Exactly. And then at least 52 of those people who got bonuses totaling, for the 52 of them, $33 million, left the company anyway. They weren‘t retained. They walked away. You know, you can‘t negotiate with terrorists, first of all. And it‘s a payment poorly made. These people should have gotten nothing. They should have gotten paid to do their job.
To get bonuses for bringing a company to its knees is absolutely outrageous. Listen, I don‘t know what secrets they‘re going to sell or what secrets they‘re going to walk away with. I know people, some of them are stupid, but nobody, even the stupid people that I know, were able to lose a billion dollars. These people did that and should not be rewarded for it.
MATTHEWS: OK, thank you very much, U.S. Congressman Gary Ackerman of New York and U.S. Congressman Kevin McCarthy of California.
Tonight at 7:00, you‘re going to hear from President Obama in a town hall meeting out in the famous OC, Orange County, California. And when we return, President Obama defends Tim Geithner as criticism grows against the Treasury secretary. That man is also on the hot seat. I mean the president, as well, but Geithner first. Well, first it was Liddy, then Geithner. I expect the president‘s going to feel the heat, too.
You‘re watching HARDBALL. We‘re talking bonuses at AIG, only on
MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL. Who in the government knew about those big AIG bonuses and when did they know it? Pat Buchanan is an MSNBC political analyst and Bob Shrum‘s a Democratic strategist and MSNBC political analyst.
Shrummy, we just heard—Pat and I were just talking about the incredible accusations by Congressman Ackerman of New York that a lot of that bonus money went to top executives at AIG not to keep their great services at AIG but to prevent them from going off and selling what they knew about AIG to competitors and hurting AIG—in other words, payoff money, hush money.
BOB SHRUM, DEMOCRATIC STRATEGIST, MSNBC POLITICAL ANALYST: Yes. I
you know, I think we ought to be really careful as we throw the charges around here, that we have some evidence...
MATTHEWS: No, this was Ackerman who made the charge, and we‘re repeating his charge.
SHRUM: I understand. I‘m not—Chris, I‘m not accusing you of it. But I think calling these folks “terrorists” or suggesting that somehow or other, Geithner was in some kind of a conspiracy to conceal this over the last few months—there‘s no evidence of that.
This is a mess. It‘s a mess the president is moving, I think, pretty decisively to try to fix right now. And at the end of the day, two or three months from now, we won‘t be talking about this. And by the end of the year, we‘ll be talking...
(CROSSTALK)
SHRUM: ... about whether the economy is recovering and whether we passed health care.
MATTHEWS: Shrummy, don‘t you want to know who in the House/Senate conference pulled out the ban on these bonuses? Somebody did it.
SHRUM: Well, to violate my own rule—to violate my own rule, I have a pretty good guess. I think the lawyers got to run this part of the process, and they said, Oh, we have to be very careful about these contractual obligations. They raised that point. Someone on the staff or on the staffs working on the conference committee made this addition into the bill, and everybody just accepted it. No one thought twice about it. No one reflected on it. And by the way, you could have debated this bill for months, and unless we‘d reached March 15th and the bonuses, no one would have reflected on it.
MATTHEWS: Wow, you‘re tough today. Pat Buchanan?
PAT BUCHANAN, MSNBC POLITICAL ANALYST: Well, first of all, let me say what Mr. Ackerman is suggesting is an act of extortion on the part of these employees, and, If you don‘t give us our bonuses, we‘re going to walk away with the company secrets...
MATTHEWS: We‘re going to change uniforms...
(CROSSTALK)
MATTHEWS: ... give away the signals.
BUCHANAN: Exactly. We‘re going to let this company go to hell and we‘re going to walk away. And therefore, then Geithner turns around and gives them $30 billion, and these guys get their bonuses. The extortion succeeded.
Secondly, I understand Olympia Snowe and someone in the House both put this in the bill. So when it goes to conference, it is automatically in the bill. Who in the devil has the power of staff to go in and take that out when senators and members of the House have done this? As for...
MATTHEWS: What about the charge that the administration wanted that ban on bonuses in the draft, or the final version of the bill, the stimulus package, it would be in there? It‘d be in there, if that‘s what they wanted.
BUCHANAN: Of course. I mean, yes. But who has the power to contradict both houses of the Congress of the United States in the conference? I can see if there‘s stuff that goes in from one house, Chris, not in the other, the conference decides it‘s out. As for the president of the United States, they have a problem of confidence and they have a problem of credibility. As for Mr. Geithner, it looks to me like he‘s about to be thrown off the sleigh to slow down the wolves.
MATTHEWS: Pat, it seems...
SHRUM: Pat, I will bet you...
(CROSSTALK)
SHRUM: ... a lot of money that‘s not going to happen...
MATTHEWS: What‘s not going to happen?
SHRUM: ... a lot of money that‘s not going to happen.
MATTHEWS: What‘s not going to happen?
BUCHANAN: I win.
SHRUM: Geithner is not going to be thrown under the bus. He is not going to be fired. And frankly, I think it‘s terribly unfair for people to imply that somehow or other, he‘s completely lying on the basis of no evidence whatsoever. He says he found out about this last Tuesday, talked to Liddy, talked to the president. So I don‘t think that we should engage in a kind of McCarthyite-like exercise here.
BUCHANAN: Well, you know...
SHRUM: We ought to...
(CROSSTALK)
BUCHANAN: Nobody said he didn‘t find out before—no one said he didn‘t find out before last Tuesday. But they knew last Tuesday, and I‘ll tell you that, that phony act everybody put on on Sunday, how deeply outraged they were, when they must have known this by Thursday, was preposterous. And the president of the United States, frankly, showed how ridiculous it was when he started talking about, I‘m choked with anger.
MATTHEWS: What do we make of the fact that—Bob, what do you make of the fact of Liddy‘s testimony today, I presume under oath, to the Congress, saying that Bernanke, the Fed chair, and his people were in every meeting, including the meetings of the compensation committee? Here he is. Here‘s the AIG CEO, Edward Liddy, talking about how the government was involved in all the discussions of how big a bonus system to have.
MATTHEWS: What did you—well, what do we make of the fact that -
Bob, what do you make of the fact of Liddy‘s testimony today—I presume under oath—to the Congress saying that Bernanke, the Fed chair, and his people were in every meeting, including the meetings of the compensation committee?
Here he is. Here‘s the AIG CEO, Edward Liddy, talking about how the government was involved in all the discussions of how big a bonus system to have. Here he is.
(BEGIN VIDEO CLIP)
REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: ... that Chairman Bernanke or his designated person at the Federal Reserve was informed that you were going to make these payments and acquiesced in that decision?
EDWARD LIDDY, CEO, AMERICAN INTERNATIONAL GROUP: Yes. Everything we do, we do in the partnership with the Federal Reserve.
There was no intent to deceive or hide anything.
(END VIDEO CLIP)
BUCHANAN: Chris...
(CROSSTALK)
MATTHEWS: So, are we to assume there was a division here of knowledge between what the Fed knew and approved, Bob, and what Treasury knew and approved?
BOB SHRUM, DEMOCRATIC STRATEGIST: Well, I—I—you know, look, Geithner has said—and unless somebody comes up with some evidence to the contrary, I‘m going to choose to believe him—that he found out this was going to happen on March 15, last Tuesday, and that he called the guy and said, we ought to pull back on this.
Now, let me make it clear, I‘m not defending this. The business I used to be in, political consulting, we had bonuses. If your candidate lost, you didn‘t get the bonus.
(LAUGHTER)
SHRUM: I don‘t think most of these folks should have gotten the bonus in the first place. But I think we now ought to go forward, fix the system by regulation...
BUCHANAN: Right.
MATTHEWS: Yes.
SHRUM: ... and make sure that, in our anger, we don‘t endanger the whole financial structure.
(CROSSTALK)
BUCHANAN: Before we...
(LAUGHTER)
BUCHANAN: Before we fix the system, we have got to find out...
(CROSSTALK)
MATTHEWS: We have to go and go by the definition in the dictionary of a bonus. A bonus is for doing something well.
BUCHANAN: Exactly.
These are retention bonuses, and a lot of guys got them that had gone already.
SHRUM: I agree with that. I‘m not defending—I‘m not defending what happened here, Pat.
(CROSSTALK)
SHRUM: I‘m just suggesting that you shouldn‘t turn into Joe McCarthy. That‘s all.
BUCHANAN: OK.
(LAUGHTER)
BUCHANAN: We don‘t need to hear about your consultancy anymore.
(LAUGHTER)
BUCHANAN: What we want to know is why Geithner was clueless until last Tuesday, if he‘s secretary of the treasury, and he‘s giving them $30 billion.
SHRUM: Because there are 30,000 pieces of paper about this...
MATTHEWS: OK.
SHRUM: ... floating around. You don‘t necessarily know all of it.
(CROSSTALK)
SHRUM: This is a tiny, tiny fraction of the TARP money he‘s dealing with.
(CROSSTALK)
MATTHEWS: What‘s happening here is that you fellows are blaming Geithner. The Democrats and the White House are generally blaming Liddy. And the conservatives out there...
SHRUM: I‘m not blaming anybody.
MATTHEWS: Well, the conservatives out there are blaming the whole bailout system. They‘re basically taking a nihilist approach, saying, if you backed these huge billion-dollar bailouts, it‘s your fault, because you can‘t watch all this money.
BUCHANAN: All right. Chris, who put the president into this mess?
That‘s the key question. Who did it to him?
MATTHEWS: What part of the mess? The whole big mess?
BUCHANAN: The whole thing, this thing. This whole week, he‘s been hammered. He‘s been hurt.
SHRUM: George Bush—George Bush put him in this mess.
(CROSSTALK)
BUCHANAN: OK, maybe Rush Limbaugh...
(CROSSTALK)
MATTHEWS: Well, here he is today. Here he is today...
BUCHANAN: Rush Limbaugh did it, huh?
MATTHEWS: ... because the president—I‘m going to tell you, the president does not want to talk about this, which tells you something.
He wants to talk about what he calls the culture of greed and risk-taking he inherited and the need for reform down the road. He doesn‘t want to talk about the last week.
BUCHANAN: Good luck.
MATTHEWS: He doesn‘t want to talk about Liddy—about Liddy. He doesn‘t want to talk about Geithner.
Here he is doing what you have to call his dodgeball. Here he is.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Tim Geithner didn‘t draft these contracts with AIG. There has never been a secretary of the treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who‘s had to deal with the multiplicity of issues that Secretary Geithner is having to deal with all at the same time.
And, you know, he is doing so with intelligence and diligence.
Nobody‘s working harder than this guy.
(END VIDEO CLIP)
MATTHEWS: You know, it is—there is—I do hear stories, Bob Shrum, if you want to take the defensive position here, a defending position, that Geithner doesn‘t have a full—full staff yet. There‘s been a real slowdown in getting people approved, with this constant vetting that never seems to end, that gets more brutal every day.
It‘s hard to put this administration together. Is that a problem here? He doesn‘t have the—the faculty right to deal with the work he‘s got? There‘s a president of the United States saying, my treasury secretary is overburdened. He can‘t do the job.
I mean, that‘s an amazing admission, I think.
SHRUM: Well, he‘s not—he‘s not really saying that. He‘s saying he has as many challenges to deal with as Alexander Hamilton.
And, frankly, the kind of things that are being said about him remind me of the kind of things that were said about Hamilton by his political opponents.
The real question here is whether or not we‘re going to come up with a coherent way to save the financial system.
Eric Cantor, the Republican in the House today, said, this is it, no more bailouts.
I know what he wants. I know why he wants that. He wants the economy to collapse, because it‘s the only way they think the Republican Party can come back.
MATTHEWS: But you‘re not blaming anybody.
BUCHANAN: Let me...
(CROSSTALK)
MATTHEWS: Bob, I want to get that straight. You‘re not blaming anybody, but you just accused Cantor of wanting to bring the whole house down.
SHRUM: I‘m blaming the people who don‘t have any constructive answer.
MATTHEWS: OK.
BUCHANAN: All right.
SHRUM: I‘m blaming the people who have no constructive answer to the financial crisis and those who engage in what I think are smear tactics without facts and without evidence.
(CROSSTALK)
BUCHANAN: All right. Well, somebody—two things. Mr. Shrum is correct on one point.
But the first thing is, somebody put the president of the United States in a horrible mess, where the White House has been hammered for three or four straight days. They ought to find out who and they ought to get rid of him.
MATTHEWS: That person who did what?
BUCHANAN: I don‘t know—who has brought this disaster on him?
Was it Geithner—Geithner...
MATTHEWS: Well, give me a particularity here.
BUCHANAN: ... Geithner or Liddy or...
MATTHEWS: You mean who let the bonuses stay...
(CROSSTALK)
BUCHANAN: And who was unaware of this, what the explosion would be?
But Bob is right about this. This thing has undercut completely any public support, Chris, for...
MATTHEWS: For any more—any more bailouts.
BUCHANAN: ... AIG or for bailouts of banks.
And some—it may be seen by everybody that it‘s got to be done, and it ain‘t going to be done, and, in that case, kaboom.
MATTHEWS: OK. I like that word.
(CROSSTALK)
SHRUM: Well, and, in that case, we will be in—all be in deep trouble.
(CROSSTALK)
MATTHEWS: Well, check that word on—on Google tonight. The only guy to use the word kaboom tonight was Pat Buchanan.
(LAUGHTER)
MATTHEWS: Thank you, Pat.
Not exactly a happy conversation, but a very directed one.
Anyway, thank you, Pat Buchanan.
And, thank you, Bob Shrum.
Up next: President Obama makes his Final Four picks, on a lighter
lighter note. This is about the NCAA basketball tournament. March madness has become in politics, as well as in basketball, as we see.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. Time for the “Sideshow.”
First up, from the department of fun and games, a week ago, president press secretary—presidential Press Secretary Robert Gibbs said that, in a spirit of transparency, the president would be releasing his picks, bracket by bracket, for the winners of the upcoming NCAA tournament for basketball.
In an interview aired today on ESPN, the president predicted the results in the Final Four.
(BEGIN VIDEO CLIP, ESPN)
UNIDENTIFIED MALE: Let‘s start with the Pitt/Carolina matchup.
OBAMA: Going with UNC.
UNIDENTIFIED MALE: OK.
OBAMA: I‘m going with experienced hands. I think that Lawson is going to be healthy.
(CROSSTALK)
OBAMA: That‘s going to be the difference.
UNIDENTIFIED MALE: Louisville-Memphis.
OBAMA: I‘m going Louisville. That is the championship game.
UNIDENTIFIED MALE: OK.
OBAMA: Is there a drumroll around here?
(LAUGHTER)
(DRUMROLL)
OBAMA: I‘m going with the Tar Heels.
UNIDENTIFIED MALE: OK.
Now, can you get this on Air Force One? Because I think you‘re going to be traveling then.
OBAMA: We are going to be watching it, but it will probably be 2:00 in the morning where we are.
(LAUGHTER)
UNIDENTIFIED MALE: OK.
OBAMA: We have got the NATO summit, but we‘re going to be trying to catch as much of this as possible.
The Tar Heels that are watching, I picked you all last year. You let me down. This year, don‘t embarrass me in front of the nation, all right? I‘m counting on you.
(LAUGHTER)
UNIDENTIFIED MALE: All right.
OBAMA: Appreciate it.
UNIDENTIFIED MALE: All right. Thanks.
(END VIDEO CLIP)
MATTHEWS: Well, UNC got knocked out last year. But, as a grad of UNC grad school and a lover of that southern part of heaven, I have got to like the president‘s bet.
Anyway, there‘s his bracket. there‘s his bracket: Louisville beating Memphis, North Carolina taking Pitt, then North Carolina for the national championship.
Don‘t feel bad, Pittsburgh. He picked you guys for the Super Bowl.
Next up: this time, for money. President George W. Bush yesterday delivered his first money speech in Calgary, Canada. True to his family traditions, he refused to knock his successor—quote—“I think it‘s time for ex-president to tap-dance off the stage”—that‘s him talking about himself—“and let the current president have a go at solving the world‘s problems. If he wants my help, and I agree with him, I will give it.”
Can‘t knock that. Quite different from his former V.P., who is now competing with Rush Limbaugh as the number-one GOP firecracker out there.
And now for the “Big Number” tonight.
So, what‘s been the big effect of all the talk about this—these over-the-top bonuses? Well, how many now say they support government lending to banks and financial institutions out there? Just 37 percent of us, a new low in the CBS poll just taken. As recently as December, more Americans approved than disapproved of using tax dollars to save the banks. Now just 37 percent back bailouts for banks and other financial institutions—tonight‘s little bitty “Big Number.”
Up next: the chairman of the Senate Banking Committee, Senator Chris Dodd, on who stripped out that legislation that he wanted that would have blocked these bonuses.
This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
BRIAN SHACTMAN, CNBC CORRESPONDENT: I‘m Brian Shactman with your CNBC “Market Wrap.”
Stocks rallying after the Federal Reserve announcing some aggressive new steps aimed at reviving the U.S. economy. The Dow industrials gained 90 points, the S&P 500 up 16, the Nasdaq gaining 29 points—the Fed announcing it would pump an extra $1 trillion—that‘s right, with a T. -- $1 trillion into the mortgage market and long-term treasury securities. That‘s expected to push interest rates of all types of loans. Mortgage rates could drop to the low 4 percent range.
Meantime, as expected, the Fed also left a key interest rate unchanged at virtually zero.
IBM reportedly in talks to buy Sun Microsystems for $6.5 billion. The news sent Sun shares soaring 78 percent on the day. IBM fell 1 percent.
And oil prices dropped on news that U.S. oil and gas inventories are absolutely bulging. Crude fell $1.02, closing at $48.14 a barrel.
That‘s it from CNBC, first in business worldwide—now back to Mr.
Matthews and HARDBALL.
(BEGIN VIDEO CLIP, “MORNING JOE”)
SEN. EVAN BAYH (D), INDIANA: About 15 of us in the United States Senate, moderate Democrats, for lack of a better description, have been gathering. And we have finally decided to make an announcement that we‘re coalescing in a—in a group to try and focus on making the changes the American people need, but to make sure that they‘re done in a practical way that will actually work.
(END VIDEO CLIP)
MATTHEWS: Well, is the ice cracking here? That‘s Indiana Senator Evan Bayh, a Democrat, on “MORNING JOE” this morning setting out what looks be not a—if not a breakaway group, certainly a new faction within the Democratic Party.
And you have to wonder why a victorious party that has got all the cards right now would beginning to—why would it start to fragment right now?
We have got David Corn joining us right now and Howard Fineman.
Why? You just talked to him.
HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT: He says it‘s—it‘s, I think, because of the budget. I think that‘s—that‘s key.
The White House is floating the idea of maybe trying to get their big budget through with a special procedure that would only require 50 votes in the Senate.
What these people, most of whom are concerned about the deficit, number one, long-term deficit, are saying is, uh-uh, you‘re not going to jam it through that way. If we can hold together, we can keep you from passing it even just with 50 votes, not the 60 for the filibuster, but 50.
MATTHEWS: They can hold him below 50?
FINEMAN: I think that‘s the number-one motivation.
They had Kent Conrad, who is the head of the—the budget deficit hawk among the Democrats. He‘s not in that group, but he just spoke to that group.
MATTHEWS: OK.
What this has done, David, is expose perhaps what looks to be the new strategy of the Democratic Party: no more bipartisanship, no more going for 60 votes. Jam through health care, education and energy. Get it all done through reconciliation. Treat the other party like it‘s not there. Talk to the right wing—talk to them all like Dobbs did—or Gibbs did the other day, referring to the former vice president as part of the Republican cabal.
In other words, don‘t treat them as an alternative party. Treat them as noisemakers.
DAVID CORN, WASHINGTON BUREAU CHIEF, “MOTHER JONES”: In other words, do what Bush did with his tax cuts. That‘s how a lot of bills...
(CROSSTALK)
MATTHEWS: Ignore the opposition?
CORN: Ignore the opposition. I mean, you can make the argument...
(CROSSTALK)
MATTHEWS: Well, is that what you think Bayh is worried about? Or is he worried about having to vote on card check and some of these very tricky issues down the road, and he‘s trying to warn the White House, we‘re not going to be there?
(CROSSTALK)
CORN: Bayh may be worried about Bayh. He‘s up for election in 2010. Indiana should be an easy state for him, although there‘s some concern that it‘s not as liberal as some other states that elected...
(CROSSTALK)
MATTHEWS: And his father lost reelection.
CORN: His father lost reelection.
And, you know, who knows. I mean, he was interested in presidential politics before. He may be looking down the road. If—if the Obama economic agenda doesn‘t work, it doesn‘t—he may be open or susceptible to a Democratic challenge.
(CROSSTALK)
MATTHEWS: He‘s lined up a list.
Here he is today. I want to let him speak, and then we‘re going to give you the list of Democrats that he‘s corralled and offered up as a list of moderates who are worried about being identified in a Democratic herd. Here he is.
(BEGIN VIDEO CLIP, “MORNING JOE”)
BAYH: Because, as you know, on most things, you have to get to 60 votes in the Senate. And that‘s going to be hard, and it‘s going to take the centrists to get us there.
One other good piece of news, I called Rahm Emanuel the day of our first meeting to let him know. His first response was, “I would like to attend the announcement.”
Our strong preference would be to work with our committee leaders, to work with leadership to make sure that our concerns are taken into account in the bills that are formed in the committees before they get to the floor, so that it can be a cooperative relationship.
We would much prefer that. The difficulty comes when things are just handed down without taking into account the point of view of some of us who have a slightly different point of view.
(END VIDEO CLIP)
MATTHEWS: Let‘s take a look at this breakaway group on the map here and look at who they might be, why—you know, location, location, location.
Here they are. Look at, though, where the senators are from. This is a breakdown of the states won by President Obama and the states won by John McCain last November.
They‘re apparently—well, it‘s hard to tell you where they‘re from, but that shows where they‘re from. They‘re from reddish states.
FINEMAN: And Indiana is sort of one of them. I don‘t think Evan Bayh is running scared about his re-election chances. He‘s quite popular there. But when he was governor and through his whole career, he‘s been a deficit hawk. He‘s been pretty much of a spending hawk all the way through. He views himself—
MATTHEWS: As is Indiana.
FINEMAN: As is Indiana. He views himself as a guy who has his eye on the long-term deficit. That‘s a part of it. But I do think he wants political cover as well, not necessarily on Card Check. But none of these guys wants to stand-alone. They would like to have a group.
It started out with Bayh, Tom Carper of Delaware, Blanche Lincoln of Arkansas. It‘s expanded. The leader‘s office, Harry Reid‘s office, has sort of given it his blessing, although theirs rumbling—
(CROSS TALK)
CORN: Yes, there is rumbling. I don‘t think they‘ve given it the blessing. I think what they‘re trying to do is not create a fight that will give it more attention. Already, you know, some people on the Hill are saying that the way that Bayh spoke about it this morning was going too far. When he said, we want to make sure legislation is done in a practical way, that‘s kind of a shot at Harry Reid and also at the White House.
FINEMAN: It‘s pragmatic. I just asked him about that. I said, OK, you‘re saying you‘re pragmatic. I just asked him a few minutes ago, you‘re pragmatic. Does that mean Barack Obama is not, because that‘s sort of the implication.
MATTHEWS: He said?
FINEMAN: He said, no, I think he is pragmatic. He said, when he
interviewed me for consideration for the VP slot—there‘s that again -
-
MATTHEWS: Keep going. Turned me down.
FINEMAN: He told me he was a pragmatist. I guess they shared the secret pragmatist hand shake. But look, if you‘re going to have a semi-renegade in the Senate—and I don‘t really think Evan Bayh is—you‘d rather have him. I‘m sure Harry Reid is sort of—yes, he‘s a little concerned, but they‘re counting their blessings.
They want to keep these people inside the tent. I believe the fact that Rahm Emanuel is perfectly willing to deal with them.
MATTHEWS: Claire McCaskill is going to be with the president probably. I think it‘s going to be interesting to watch as she works her way through this. Anyway, Howard Fineman, good reporting, fresh from the source. David Corn, thank you.
Up next, Senator Chris Dodd, chairman of the Banking Committee, he‘s coming here to tell us how this whole thing came down and how those attempt to stop those bonuses didn‘t work out when it came down to writing that stimulus bill. We want to hear it all from the horse‘s mouth. You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL. Senator Chris Dodd chairs the Banking Committee and joins us right now. Senator Dodd, how did your efforts to try to stop the bonuses from going to AIG or anywhere, rather, get stopped?
SEN. CHRIS DODD (D), CONNECTICUT: Well, first of all, Chris, having written the provision in the bill that passed unanimously in the Senate to deal with golden parachutes, bonuses and excessive executive compensation, we would—the debate this evening would be why didn‘t you try to write anything in the stimulus bill.
At the time, there was resistance to even that proposal, although no one objected to it. When it got into the conference, which you understand that meeting between the House and the Senate—I was not a conferee. That is, I wasn‘t sitting in there with a voice or a vote. Nonetheless, it‘s been reported widely the administration had problems with my language, the Dodd language in the stimulus bill on this compensation.
They came and said, look, we‘d like to make some modifications. This is a month and a half ago. The alternative, frankly, was that we might lose the entire amendment as part of that negotiation. That‘s what happened to a couple other amendments. So we agreed to some modifications.
But the important language is not just the date in the thing, but also the insistence that the Treasury be able to then reach back to these bonuses or compensation packages when they‘re inconsistent with the Tarp legislation or in contrary to public interest. In fact, it‘s that very language tonight which the Treasury is using as the basis for which they believe they can reach back and go after some of these bonuses.
So I‘m glad I wrote the language. There was a lot of opposition. I find it somewhat ironic, Chris, that over the last month and a half I‘ve been highly criticized by many for writing that language in the bill. Some of the same are now criticizing me because I wasn‘t restrictive enough. I‘m glad I wrote it. If I hadn‘t done so, we wouldn‘t be talking about that tonight.
MATTHEWS: So you wrote language that got as far as the conference committee, coming out of the Senate version, which said there would be no bonuses and this kind of thing to companies that benefited from this bail out money.
DODD: Right.
MATTHEWS: Then somebody—who came to you from Treasury and told you to get rid of that language or to modify it or put in the grandfather of February 11th?
DODD: It was staff. I meet with staff and talk about it. I don‘t know the names of the individuals. But they expressed their concerns about it. They weren‘t the only ones, but certainly expressing their concerns about lawsuits and other things that might happen.
I don‘t believe—I don‘t have any information they were thinking about AIG at all. No one was talking about any bonuses. I only learned about the bonuses at AIG late last week. A month and a half ago, in February, it had more to do with these contracts and the abrogation of contracts. I believe that was their motivation. It seemed at the time that, provided we had that language that allowed the secretary to reach back or the Treasury to do so, that they only seem technical in nature.
So the choice was, do I accept that or, frankly, the alternative, while it wasn‘t explicitly stated to me, was that the entire amendment would be dropped. There were those who wanted to do that.
MATTHEWS: What do you think of the AIG bonuses, the 165 million dollars that‘s been reported? Should those people give that money back?
DODD: Absolutely.
MATTHEWS: Should the government sue for it? What can you do legislatively or whatever way to get that money back to the government?
DODD: Well, one, the provision of that bill and the language of my amendment in the stimulus bill would I think give the justification for the Treasury to go back and go after those bonuses.
Secondly, Max Baucus tonight I know is working with chuck Schumer and others on a tax provision that would allow us to recapture at least a good part of those bonuses as well. I‘m sure there are others who are looking at the legal ramifications.
People talk about these contracts as if somehow they were sanctified. Contracts are renegotiated all the time. Tell that to a labor union, for instance, that finds today it‘s having to renegotiate its contracts. So the idea that somehow this contract is so sacrosanct you can‘t touch it I find offensive, quite frankly.
My hope would be that those who got these bonuses would step back up at this moment and say, you know what, we‘re going to give it back. Let‘s resolve this matter without a lot of lawsuits and other matters.
MATTHEWS: Well, if these contracts are not sacrosanct, as you say, why didn‘t you make that argument to the Treasury officials who came to you and asked to have them exempted.
DODD: I believe we did at the time. Remember, I wasn‘t negotiating with myself here. I was very proud of the amendment we had adopted unanimously.
MATTHEWS: -- protected against the Treasury Department, that was looking out for these contracts. What argument did they make that was so sound, so strong that you had to relent?
DODD: Well, the argument, in a sense, was—in a sense, the argument was either we accept this or you lose the amendment altogether. That was the danger for us.
MATTHEWS: Who was going to yank it? Who had the clout to remove that entire restriction on bonuses that you had put in? Who could have pulled that out at conference?
DODD: I can‘t tell you, but that‘s certainly what happened with the Widen/Snowe amendment dealing with the tax provisions. That entire amendment was dropped from the conference report. There‘s certainly evidence that you could change those amendments. That‘s the alternative. This happens all the time. Particularly if you‘re not in the room, but trying to protect what you have written.
Again, it was unanimously adopted and it came with modifications.
At the time, their argument was the legal ramifications of all of this. In retrospect, if I had known then we were dealing with AIG bonuses of this nature, then obviously, we wouldn‘t have made any changes at all. At the time, it seemed like a relatively innocent enough request and we maintained the bulk of that amendment, including the right for the Treasury to reach back and go after these bonuses.
MATTHEWS: OK, but you believe that Congress has the reach to get those bonuses back? And what means would they use?
DODD: Well, again, I think the language of this amendment that was adopted allows for that, as the Treasury has suggested this evening is the case as well, and certainly the ability to go after and tax them as well as a way of recouping the money. And there may be other legal means as well. I‘m not—I know the Judiciary Committee and others are looking at these contracts. You have to look at the contracts themselves to determine whether or not there‘s any opportunity to rewrite them at all.
MATTHEWS: We‘re looking at a report that came out of one of these websites that talks about the kind of money that AIG has been giving in PAC money or whatever contributions. You‘ve got over 100,000 in the last cycle from them. President Obama has over 100,000 dollars. John McCain got 59,000. Senator Clinton as a candidate got almost 40,000. When most people see this kind of money, it‘s not huge money compared to the bonuses, but it looks like access money. What‘s your reaction to that? The kind of access to involve yourself in Congressional conferences, House/Senate conferences. Does it open doors for AIG to give this kind of money around?
DODD: Well, not in this case. We never heard at all from AIG nor did they make any requests that I‘m aware of at all at the time. Certainly, look, Chris, you and I have talked about this issue on numerous occasions in the past. Had I had my druthers, if I could write the law itself, we would have public financing in these campaigns rather than having to go out raise the money.
Candidly, in the absence of that, in order to run for public office, Democrats and Republican, you raise money. Remember, a year, a few years ago, AIG was a respected company with a long history and a long tradition. I‘m not clairvoyant. I didn‘t know when I was raising money for a campaign that AIG was going to pose such serious problem.
This much I have done; I‘ve received no Pac money from any company receiving any Tarp money at all. If we can identify who these people are that received these bonuses, and if I received a nickel in contributions from any of them, that money will go to charity or go someplace.
MATTHEWS: But you got the money from AIG. And AIG got the government money.
DODD: You‘re making a connection here that somehow that‘s the reason they did. And that‘s completely false.
MATTHEWS: We‘ll be right back. I want to talk to you about this culture of risk taking and greed. We‘ll be right back with Senator Chris Dodd on HARDBALL.
(COMMERCIAL BREAK)
MATTHEWS: We‘re back with Senator Chris Dodd of Connecticut, the chairman of the Banking Committee. Senator, a couple accusations came across today. One was Congressman Gary Ackerman of New York was working on something today with Mr. Liddy, the CEO of AIG. He talked about—there was talk today, in fact on our show earlier tonight, that there may have been some sort of fear factor here on the part of AIG, that if they didn‘t retain these top executives through these bonuses, that they would go off and do mischief against AIG. Do you have a sense of that story at all, that they would do negative work against them in some way?
DODD: None whatsoever. If that‘s the case, that‘s terrorism of some fashion. The usual argument we get is you‘re going to lose talented people and you can‘t replace them. I just don‘t find that argument has any credibility whatsoever. I believe in performance pay. If people are actually helping something get back on track again, and make a difference that way, I‘m not opposed to bonuses where they make sense, where you‘re increasing the performance of some people.
But the idea that you‘re going to pay people because they may leave you or somehow they may terrorize you—it seems to me, at that very juncture, if Mr. Liddy knows that—he is a good man, I‘m told. He should have been contacting the FBI immediately.
MATTHEWS: I‘m trying to get something straight in my head about the Secretary Geithner, the new Treasury secretary. He said in all the testimony this week we‘re hearing he didn‘t hear about these AIG bonuses until last Tuesday. Yet you tell us during the course of the writing of the conference report on the stimulus bill that his agents, his people were coming to you saying we‘ve got to protect these contracts for bonuses. If he didn‘t know about these bonuses, why was he fighting for their contractual rights?
DODD: Well, I‘ll have to let them speak for themselves. But there were a lot of institutions, Chris, including some smaller banks, as well as some larger ones, that were concerned about these long-standing contracts, that was the argument. Certainly no one mentioned AIG to me at all or anyone on my staff. But that argument was being made, in saying there would be a deluge of lawsuits if we don‘t deal with this.
At the time, it seemed relatively innocent. We insisted—I know I‘m maybe not making this as clear as I‘d like—that we insisted that that language modify that date to still give the Treasury the opportunity—and I don‘t have the language right here—but basically says inconsistent with the Tarp or contrary to public interest. I believe these bonuses are contrary to public interest. So the date becomes less significant and allows the Treasury to back go after these bonuses.
MATTHEWS: Bottom line, you don‘t believe need they‘re grand fathered in then?
DODD: No, I don‘t. I don‘t think so.
MATTHEWS: OK. Senator Chris Dodd of Connecticut, sir, thank you for very much for joining us and clearing up that matter. In one hour, at 7:00 Eastern, a special edition of HARDBALL with live coverage tonight of President Obama‘s town hall meeting out in O.C., Orange County, California. That‘s coming back here in an hour. Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.
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