Economy & Budget

The Dems’ AIG Bonus Scam

The Democratic Congress put on quite a show for us last week (and this week may top last).

In a memorable performance, they feigned surprise and shock that $165 million of taxpayers’ dollars were spent on bonuses for executives of the failed insurance giant AIG.

“If they don’t give the money back, we will put in place a new law that will allow us to tax these bonuses at a very high rate so that it is returned to its rightful owners — the taxpayers,” New York Democratic Sen. Charles Schumer fumed in a Senate speech. “So, to those of you getting these bonuses, be forewarned: you will not keep them.”

It was a scene reminiscent of the one in the movie Casablanca in which Captain Renault tells Rick he is closing down his saloon down because, “I’m shocked, shocked to find that gambling is going on in here” as a casino worker hands Renault a wad of money and says, “Your winnings, sir.”

Schumer knows perfectly well that this $165 million for AIG executive bonuses is something he voted for just a few weeks earlier.

The same is true of each of the other ten Democrats, including Senate Majority Leader Harry Reid, who have joined Schumer in signing a letter making the same threat he announced in his floor remarks.

It’s a farce — a sham.

What’s going on here is that the news media finally got around to mentioning that this $165 million for bonuses is part of the more than $170 billion of taxpayer money that Congress and President Obama insisted must be awarded in haste to the failed insurance giant American International Group, Inc (AIG). The public, understandably, is really angry.

So the Democrats are terrified that the public might actually start figuring out what an incredibly incompetent job President Obama and the Congressional Democrats are doing.

What if average citizens begin asking themselves the sort of questions that the Democrats can depend on the mainstream media to cover for them by not asking? Questions such as,

  • Why was Congress so reckless in writing the bailout legislation that it didn’t include limitations to preclude waste such as those big bonuses?
  • Anyone who reads the news knows that the financial markets are truly global. When writing the legislation, Congress had to know that AIG would pass billions of U.S. tax dollars to foreign banks. Why didn’t Congress make that contingent on equal or greater contributions by foreign governments? Why are the French, the Germans and the British having their banks rescued by American taxpayers?
  • What other questionable expenditures of taxpayers’ dollars are buried in the barrels of billions the Democrats are rush delivering to seemingly anyone who puts his hand out? Weren’t there better alternatives than simply giving away taxpayers’ billions to anyone and everyone who got into severe trouble by taking reckless risks? Why no public hearings on this?
  • Was the main reason for such a great rush to avoid close scrutiny of where the money was going? How many so-called “stimulus” expenditures are really nothing but gigantic rewards to political allies?

What the Democrats decided is that they needed a stunt to divert attention away from their stunning incompetence.

So, last week, the House voted to “take back” those contractually obligated bonuses, and the Democratic leadership has promised that the Senate will do the same this week.
This is not a comedy the Democrats are performing for us — it’s a tragedy.

Equally tragic is the blatant disrespect for the Constitution of the United States that is on display throughout these shenanigans. Article 6 of the Constitution requires that the President and Member of Congress swear to support the Constitution. Of course, the Constitution doesn’t require them to understand it or even to read it, but let’s give the driving force behind this sham, Chuck Schumer, the benefit of the doubt and presume he has read it. He is, after all, a graduate of Harvard Law School, a member of the Senate’s Committee on the Judiciary, and was a member of the Judiciary Committee when he served in the House.

Schumer knows better — and so should every member of Congress and the President. Article I, Section 9, paragraph 3 of the Constitution prohibits what they are doing because it specifies that: "No Bill of Attainder or ex post facto Law shall be passed." And what they are doing constitutes a bill of attainder.

As the Heritage Foundation’s Guide to the Constitution says, “In common law, bills of attainder were legislative acts that, without trial, condemned specifically designated persons or groups to death…,” but the Supreme Court — going back to a case in 1810 — reads the Constitutional bar to prevent legislative confiscation of property.

As James Madison explained in The Federalist Papers No. 44: “Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principle of the social compact, and to every principle of sound legislation.”

Freedom from bills of attainder and ex post facto laws are the only individual rights which the Framers deemed so important as to insert in the original document protection against both federal and state infringement.

In 1965, in United States vs. Brown, the Supreme Court once again affirmed that the purpose of Article 1, Section 9, Paragraph 3 is to prohibit “legislative punishment, of any form or severity, of specifically designated persons or groups.”

The position of the U.S. Supreme Court over the years has been that this clause of the Constitution is deemed violated if 1) The legislation in question specifies a specific group; 2) It includes some form of punishment; and 3) It does not include a judicial trial.

One, two, three — guilty on each count. Which means that what’s coming next is that the Supreme Court will give thumbs down to their pathetic pretense. And then they will feign surprise and say they tried. Trying to con the American people into believing they have nothing to do with something the public is incensed about — that’s what this big charade is really all about.

This sham is an affront to the Constitution of the United States by the Congress of the United States and the President of the United States. They are violating the solemn oath they took to bear “true faith and allegiance” to the Constitution — and by doing this, they are guilty of neglecting to “well and faithfully discharge” the duties of their offices.

Many of them don’t know what they are doing.

Many of them know but don’t care.

That’s how bad things are in Washington right now.

It’s change, all right — an appalling change from what the Founders of the American Republic had in mind for governing this great country.


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