To: Sen. Dodd
Fr: Staff
Re: Damage Control on the AIG Issue

Senator. We have staffed out the mess you we are in on this AIG thing and have come up with several recommendations.

1. It has now been widely reported that you are the single largest recipient of donations ($103,000) from executives and/or the Political Action Committee(s) of AIG. Only Barack Obama is even close. While John McCain and Hillary Clinton are numbers 3 & 4, together they don't come close to what you held them up for received.

2. It was previously reported that you got a sweetheart preferred customer rate on a mortgage from Countrywide which is now owned by Bank of America.

According to the Examiner.com:

The VIP loan to Dodd saves the Banking Committee chairman $75,000 over 30 years.

This is a significant amount of money which, in light of the fact that Bank of America's employees and PAC have donated over $70,000 to you in the past couple of years means you have been the recipient of more than $145,000 in donations and preferences from a bank over which you, as Chairman of the Senate Banking Committee, have sway.

3. According to the Wall Street Journal the two sweetheart V.I.P. mortgages you got from Countrywide were at 4.5% and 4.25% in 2008 which is about where mortgages are expected to float now that the Fed has decide to print a couple of trillion dollars to get mortgage rates down to about $4.5% to 4.25%.

We thought this was ironic and had a good laugh about it in the office.

4. You need to make sure that reporters remember that six months after the sweetheart V.I.P. loans from Countrywide came to light you got loans from a different borrower.

You should also remind reporters that you denied any knowledge that you were being given special rates, thinking that Countrywide never connected the dots that you were the Chairman of the Senate Banking Committee and a candidate for President of the United States with your going loan shopping.

5. The Dodd Amendment is a continuing problem issue. To review the issue, you inserted language into the stimulus package which provided for "exception for contractually obligated bonuses agreed on before Feb. 11, 2009"

Although this was slipped into the bill in Conference with no one actually having seen it, you are now UNFAIRLY being accused of allowing AIG to pay bonuses to its employees even though those employees created the conditions which have required the U.S. Government to provide $173 billion in bailout funds.

We STRONGLY suggested you put the blame on someone else. The someone else we suggested was the Administration which you have now done.

We, on the staff, know you would have never inserted language protecting the bonuses of AIG employees if you had not been induced asked to do so by the Administration and so you should put the blame on President Obama's people - BUT NOT PRESIDENT OBAMA HIMSELF.

You must allow the President to have plausible deniability some reasonable opportunity to claim he did not know what his staff was asking you do to.

Bloomberg.com is reporting that:

the Obama administration asked him to insert a provision in last month's $787 billion economic- stimulus legislation that had the effect of authorizing AIG's bonuses . . ."I did so at the request of administration officials, who gave us no indication that this was in any way related to AIG."

Unfortunately, you your staff did not clear this claim with the White House which had the bad taste to deny your statement:

An administration official said last night that representatives of President Barack Obama did not insist on the [language].

At the staff level, we are concerned that your claim that you had no idea that the language would have an effect on AIG bonuses makes you look like a butt-kissing jerk you may have been, under the strain of getting the legislation adopted, somewhat less diligent as you might, in retrospect, wish you had been.

Sort of like the Countrywide loan deal.

6. You have announced you will return the donations from AIG.

We have some problems with this.

A. Much of the $103,000 was given to your President campaign a point made by MSNBC.com:

Those campaign contributions were already made to his unsuccessful 2008 Presidential campaign.

B. Your Presidential campaign may not have any money left in its account to return to anyone.

C. Again from MSNBC.com

It's unclear how much Dodd will return, and to whom.

D. You need to be careful not to push this too hard. As noted above you don't have the money available to return and you don't want to put President Obama (who was number 2 on the AIG donation hit parade) in a position of having to return donations he received from the company.

7. Re-election campaign. You are up for re-election in 2010. A Quinnipiac Poll released on March 10 - a full week before the AIG bonus story broke - showed you were already trailing your likely opponent, former U.S. Rep. Rob Simmons 43-42.