News Column

AIG's Campaign Contributions to Dems a Potential Political Gift for GOP

March 18, 2009

Rob Kuznia--HispanicBusiness.com

aig contributions, campaign contributions, lobbying



Republicans hungry for a rallying cry may have found a valuable morsel in AIG, but not all of them are biting.

The troubled insurance giant -- which is under fire for lavishing $165 million in taxpayer bonuses upon executives -- may be more astute in the practice of "political insurance" than its core business. AIG poured an uncharacteristically generous amount of money into the campaign coffers of Democratic Party candidates last year.

Meanwhile, a Pew poll released Monday showed that the outrage over bank bailouts is hottest among registered Republicans.

But the man who some have painted as the de facto head of the Republican Party is defending AIG.

Radio talk show personality Rush Limbaugh likened the uproar over AIG to a lynch mob led by none other than President Obama -- the largest recipient of AIG campaign contributions in 2008, according to The Center for Responsive Politics, a 25-year-old research group tracking money in U.S. politics, which based the list on Federal Election Commission data.

"A lynch mob is expanding: the peasants with their pitchforks surrounding the corporate headquarters of AIG, demanding heads. Death threats are pouring in," Limbaugh said on the show. "All of this being ginned up by the Obama administration."

In 2008, AIG apparently sensed the need to purchase some political insurance of its own.

In that election cycle, it donated more generously to Congress than any time since at least 1990, which is the earliest year on The Center for Responsive Politics' online record. That was also the year in which the company decided to cozy up to the Democratic Party.

To be sure, the pockets of both parties are lined with AIG's desperation dollars. But Democrats were the primary recipients. Of the $587,000 the company doled out to campaigning lawmakers, nearly $443,000 -- or three-quarters -- went to Democrats, according to the Center.

AIG seemed in tune with the shifting of the political winds: Despite its higher-than-ever contribution to Congress, the company's payments to Republicans sank to a 14-year low.

Topping the list of prominent recipients is President Barack Obama himself, who took about $104,000. Public fury over the bonuses has put President Obama on a political path possibly lined with hot coals.

On Monday, he expressed outrage over the bonuses during a press briefing, but pundits doubted his sincerity, noting how his proclamation came in the form of a joke after coughing into the microphone.

"I am choked up with anger here," he said.

On Wednesday, he took responsibility for the flap, saying "the buck stops with me."

The next highest recipient was Chris Dodd (D-Conn.), Chairman of the Senate Banking Committee -- the committee with jurisdiction over financial companies . . . like AIG. He is widely credited with crafting the amendment in the February stimulus package that made the bonuses possible. Dodd received $103,100.

During Tuesday's Senate Banking Committee hearing, Dodd tempered his statements of outrage, saying the real culprits here is not AIG, per se, but the insurance industry as a whole, and the Federal Reserve, which he implied should do a better job of tracking bonuses, according to Reuters.

Despite Limbaugh's stated support for AIG, other Republicans are jumping on the hog pile, sensing political opportunity.

On Wednesday, the National Republican Senatorial Committee blasted Senate Majority Leader Harry Reid in a memo, pointing to Dodd's provision.

"As the majority leader, Senator Reid controls the agenda and he had the power to prevent this debacle," spokeswoman Amber Wilkerson said in the statement.

But prominent Republicans also took AIG's campaign money.

The biggest GOP recipient was Arizona Senator John McCain, the Republican Presidential nominee, who received $59,500.

On Tuesday, McCain told Fox News host Sean Hannity that the bonus controversy pales in comparison to the extent to which European banks were bailed out by American taxpayer dollars.

"That's the real outrage here," he said on the show. "Frankly, in many respects, it's far more of an outrage than the $100-some million in executive compensation. $20 billion to foreign banks."

The next-highest GOP beneficiary was Mitt Romney, the former Massachusetts governor and runner-up for the Republican nomination for president in 2008. He received $20,850.

In a blog post at the National Review, Romney tried to take President Obama to task for the boondoggle.

"The Obama administration was wrong to initially defend the bonuses as contractually obligated," he wrote, adding that as the new CEO of a failing management consulting firm he had to convince founding partners to return some of the company profits.
"Of course, we had no legal basis for making such a request, but without a shared sacrifice we couldn't keep the company alive."

Other major recipients include: Democrat Hillary Clinton ($37,965), Democrat Max Baucus ($24,750), Republican Rudolph Giuliani, ($13,200) and Democrat John Edwards ($7,850).



Source: HispanicBusiness.com (c) 2009. All rights reserved.


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