Barney Frank was responsible for shepherding the "Pay for Performance" bill through the House, and once again he demonstrated what a capable legislator he is.
And if you want to see how to cut through the wingnut talking heads' disinformation campaign, watch Frank in action Wednesday night against CNN's Lou Dobbs.
As you can see, Dobbs rigs the game -- laying out a string of misrepresentations and distortions and outright falsehoods about how the legislation proceeded -- and then telling Frank he has only "2 seconds" to respond. Frank doesn't let him get away with it unscathed.
Indeed, Dobbs looks pretty rattled by the end. But then, he's been looking ghastly lately anyway. I gather he's been reading his ratings.
DOBBS: Tonight in Washington, the House of Representatives passing the so-called Pay for Performance Bill mostly along party lines. The bill is a response to the raging battle over bonuses and compensation in those companies and banks that received federal money. The bill imposes new rules and limits on executive bonuses of companies receiving T.A.R.P. funds. By the way, gives treasury secretary Timothy Geithner the power to decide reasonable compensation at all levels of any company. Congressman Barney Frank, the chairman of the House Financial Services Committee, joins us here tonight. Good to have you with us. REP. BARNEY FRANK, (D-MA) CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: Thank you.
DOBBS: This legislation has had a lot of people start scratching their heads. Some of the same people by the way who are complaining about the fact that you all had not put any conditions on T.A.R.P. money you are now more than a little concerned that you're going to give the treasury secretary the power to overreach. What's your reaction?
FRANK: Well that it's typical of the people who are determined to say we're wrong no matter what we do. First, I would make one correction, Lou. It's not the secretary treasury that was in the original bill. People raised the question about expertise. So is the secretary of the treasury subject to the approval of the major bank regulators, the head of the credit union administration. As a matter of fact, three of the five will be Bush administration appointees so there's some balance there.
DOBBS: Now I feel better.
FRANK: The fact is -- secretary of the treasury. I understand, you say one thing and that's just not accurate --
DOBBS: Well, wait a minute, Congressman, don't be a snit. I simply said I feel better about it being three members of the Bush administration.
FRANK: No, and you were being sarcastic about that.
DOBBS: I was being sarcastic about that.
FRANK: Yes, you are. What I'm saying is it's a typical --
DOBBS: Let me ask you this Congressman --
FRANK: Lou, can I finish a sentence?
DOBBS: You certainly may, because you're off on such a good start, I wouldn't impede you.
FRANK: The point is, it's not just the secretary of the treasury. You made that point as if it was a criticism of too much power for one man. I believe that that was a dimwit point and we amended it to include a number of people so that we get some balance.
Secondly it does respond directly to the outrage that we had heard about the fact that when the recovery bill was passed, an amendment was added to the language that Senator Dodd put. Senator Dodd in my judgment deserves credit for pushing the whole area. He didn't get everything he wanted. We undid the part that said it couldn't be retroactive. Whether or not that holds up legally, the courts will determine. But there was a great deal of anger that this amendment had been put in there.
People should have a chance to vote on whether they want to take it out or not.
DOBBS: A chance to vote on it? They've also had a -- you know, I mean, Congressman, I have to say, I'm sort of stunned. You're saying that you're putting legislation through because people are angry, not because it has an effect that's desirable on the economy or the institutions --
FRANK: No, no, they're both. You of all people should not think that people being angry and something being appropriate are mutually exclusive, Lou.
DOBBS: I didn't say they were mutually exclusive.
FRANK: Well with, that's --
DOBBS: I'm quoting you saying that was the reason that you did it.
FRANK: No, I said that was part of it --
DOBBS: Part of it? What's the other part?
FRANK: Lou, Lou, look, I'm sorry but it's been a long day. If we can have complete sentences from each other, that would be useful.
DOBBS: I'm waiting.
FRANK: The fact is -- good. The fact is that I think this is a case where the public anger was justified, that the assumption of public policy is correct. So it's not only done because of public anger, but that is a legitimate factor. There were complaints not just -- and it's not just anger. There was an argument that it was procedurally inappropriate for there to have been a substantive change made in the recovery bill without people having had a chance to vote for it one way or the other.
I do think that's a legitimate argument for reversing that and having opened this. Then given the fact there's going to be a vote whether they are for it or not. I found it hypocritical, the Republicans who complained that this was put in there and said it was terrible who then voted to keep it there, but members were free to vote either way.
DOBBS: Well, Congressman, I mean, when you say -- start this partisan stuff, I mean, if you believe that you and Senator Dodd have showered yourselves with glory on the oversight of the financial institutions of this country, you know, I'm stunned by that. I accept your criticism of the Republicans. But I don't understand what you're saying about your own roles.
FRANK: Well I will tell you what I say about my own role. That we in fact done good over site. I didn't say I showered myself with glory. I have said this, when the Republican administration came to us in the fall and said we had to have it we resisted the speed with which they wanted and we were able to get some oversight in there, not as much as we liked. But we did have the inspector general who has made good reports. We had the GAO. By the way, we've also begun to get some money back, $29 million paid in dividends already. We also pressed for restrictions on compensation and restrictions on the excessive and lavish entertainment. We have been sufficiently successful in that, in cooperation with the Obama administration. A number of recipients are now complaining that it's too tough.
So in response to that in the recovery bill, I did find some language that said, if it's too tough, give the money back. Because it was originally hard for them to do that so we have made it possible for them to give their money back. I'm encouraging any of them who think we're being too tough to do it. But I would say the fact that they have begun to say now we are going to give the money back, is an indication that we have finally been able in cooperation with the Obama administration to put some real oversight over them.
DOBBS: If you would, listen to what AIG CEO Edward Liddy had to say as he defended the bonus payments that he made, which by the way were made possible through Senator Dodd's oversight? If you would listen to Mr. Liddy.
(BEGIN VIDEO CLIP)
EDWARD LIDDY, AMERICAN INTERNATIONAL GROUP CEO: The Americans are asking quite simply why pay these people anything at all. Here's why. I'm trying desperately to prevent an uncontrolled collapse of that business. This is the only way to improve AIG's ability to pay taxpayers back quickly and completely. And the only way to avoid a systemic shock to the economy that the U.S. government helps was meant to relieve.
(END VIDEO CLIP)
DOBBS: The house -- I'm sorry.
FRANK: Do you want me to comment or should I wait?
FRANK: First, it's wrong to say Senator Dodd's amendment or his language allowed them to happen. The bonuses happened after the Federal Reserve without Congressional input agreed to give the money last September. This is not like the one we voted on. They just did it. The bonuses were paid then. What Senator Dodd did was try to restrict this. He was not able to get everything he wanted and so the treasury under the Obama administration did succeed in getting a restriction, making it retroactive.
But if Senator Dodd did nothing they would have been paid. But what we have now said is, OK, the point you make, Senator Dodd made it possible. The language change that said they couldn't be done retroactively is what we tried to change today. So again if people are critical of what happened in the Senate in that regard or in the recovery bill, we have undone it. Secondly, I disagree with Mr. Liddy's statement. He said, people have said why pay them anything. I don't expect people to work for nothing. I expect good people to work for significant increases. What we say in the bill today is there should be bonuses that are performance-based. I do object to extortion in bonuses. I object to people saying, we know the secrets and if you don't pay us a lot more money just to stay here, we're going to quit, especially when someone did quit a few months later. We specifically say no, of course people shouldn't work for nothing. They should work for good salaries and they should be performance-based.
DOBBS: And set by as reasonable or not excessive by whom?
FRANK: The control of the currency, the FDIC and the secretary treasury. When you said before that we haven't done good oversight, but I don't know what you meant by that. We did oversight in saying you shall not -- this only applies to people who are getting a capital infusion from the Federal government while they have it. If they think these things are a problem, they can pay the money back and have no further restriction.
DOBBS: Let me be clear then as we wrap up here. The reason I said that the oversight had been lamentable is for a couple of reasons. First, there was no conditions precedent in the bailout money itself as passed by the Congress.
FRANK: Not true.
DOBBS: Back in -- well, excuse me, I'm going to give you my version of the truth because you insisted we speak complete sentences without interruption so I'm sure you'll reciprocate the courtesy.
FRANK: You're right. I will.
DOBBS: In point of fact, the Democratic led Congress along with the Bush presidency pushed through the bailout which did not have sufficient conditions precedent to the bailout money that addressed the issues of compensation, nor did it have any of the necessary oversight, including by your own committee, established, and your own chairman of the oversight panel that you have put in place, Professor Elizabeth Warren, said she's not getting sufficient cooperation to carry out her job.
FRANK: May I respond?
DOBBS: Those are the statements.
FRANK: May I respond?
DOBBS: If you can do it in like 2 seconds please --
FRANK: Oh, you're going to make that accusation and give me only 2 seconds to respond? That's just totally unfair, Lou, you have misstated --
DOBBS: You are sir an absolute exempt particular of absolute nonpartisan objectivity.
FRANK: May I finish?
DOBBS: Go ahead, please.
FRANK: You engage in that hyperbole. There is a real difference between the Democrats and Republicans here.
DOBBS: Oh, my --
FRANK: Come on, Lou.
DOBBS: Congressman Frank, you are far better than that.
FRANK: Are we going to have a rational conversation or not?
DOBBS: I'm perfectly willing to end it, but you go right ahead.
FRANK: You made a bunch of accusations and you want to shut me off.
FRANK: We did put oversight in there in advance, including the creation of the Elizabeth Warren panel. Which the Republicans debate having appointed, including a special inspector general, including big powers of the GAO, and the other thing is, you say you don't want the secretary of the treasury to have power. We wanted to restrict compensation. You cannot write a number in there because these things have to change and be flexible.
So yes, we did write in restrictions in advance on restricting compensation. They were not well used under the Bush administration. They've been better used under the Obama administration. But there were conditions present there and elsewhere.
DOBBS: Congressman Barney Frank. Thank you, sir.