Sherrod Brown "gave huge bonuses to executives."
Josh Mandel on Wednesday, May 23rd, 2012 in a campaign commercial
Josh Mandel campaign says Sherrod Brown "gave huge bonuses" to executives
Ohio Treasurer Josh Mandel, the Republican hoping to unseat incumbent Democrat Sherrod Brown from the U.S. Senate in November, mixes attacks on Brown with promotion of his own candidacy in his 30-second TV ad "Change."
Brown "gave huge bonuses to executives," the announcer and onscreen graphic say.
PolitiFact Ohio checked out the ad’s claim.
The ad cites Brown's Feb. 13, 2009, vote on H.R. 1, the American Recovery and Reinvestment Act of 2009, also known as the stimulus. It also cites a March 17, 2009, article in The New York Times about the outcry over disclosures that the American International Group paid $165 million in bonuses. The story does not mention Brown.
When PolitiFact Ohio contacted Mandel's campaign, also cited a Fox Business story that the stimulus legislation allowed firms like AIG, which had received funds through the Troubled Asset Relief Program, to give out executive bonuses that had been agreed on prior to the bill becoming law.
President George W. Bush pressed Congress to approve TARP to rescue the financial industry and avert what many feared could be a doomsday economic collapse. The Senate approved it 74-25 on Oct. 1., 2008. Brown and Ohio's then-Sen. George Voinovich were among the the 39 Democrats, 34 Republicans and one independent senator who voted for it.
Mandel has been publicly critical of Brown’s vote for TARP, which Mandel says he would have opposed.
But the root of the statement that Brown "gave huge bonuses to executives" isn’t in TARP. It is a provision of the stimulus legislation that allowed the AIG bonuses.
The final stimulus bill included restrictions on bonuses that were less stringent than those in an earlier version of the legislation. The earlier Senate version of the stimulus bill, which Brown voted for, would have capped executive pay and forbidden any firm that received TARP funds from giving out bonuses.
No such restriction was in the version passed by the House. When the two versions went to closed-door conference negotiations to work out a final compromise, the ban was rewritten to allow bonuses be paid on contracts signed before the bill's passage. That means bonuses that the companies, negotiating with their employees, had already approved.
Then-Sen. Chris Dodd, the Connecticut Democratic who was chairman of the Senate Banking Committee, wrote the amendment in the first Senate version of the stimulus bill that would have banned all bonuses. He said his amendment was altered before final passage at the request of the White House and the Treasury Department.
"At the time," the Wall Street Journal reported, "few objected to that move, which was designed to ensure the measure was constitutional."
So where does that leave the Mandel claim?
Brown did vote for the final version of the stimulus bill. But to label the stimulus bill as a vote to give "huge bonuses to executives" isn’t just inaccurate and misleading, it’s ridiculous.
Brown, in fact, had voted to ban all bonuses, but that ban was loosened in House-Senate negotiations before the final version was enacted. The legislation prohibited use of federal money for future bonuses.
But the bill did not enable bonus-paying that would not have existed otherwise. More importantly, while the bill did not prevent the AIG bonuses, it is not accurate to say that the bill -- or Brown -- "gave" anything. AIG gave the bonuses to its executives before the stimulus legislation was approved.
On the Truth-O-Meter, the claim that Brown "huge bonuses to executives" rates Pants on Fire.
Published: Friday, June 15th, 2012 at 6:00 a.m.
Josh Mandel Campaign, "Change," May 23, 2012
Email with Mandel campaign, May 25, June 12, 2012
111th Congress, H.R. 1, Bill Summary & Status
New York Times, "Outcry Builds in Washington for Recovery of A.I.G. Bonuses," March 17, 2009
CNN, "Bonuses allowed by stimulus bill," March 17, 2009
CBS, "AIG Bonuses Renew Call for Congress to Read Bills," March 25, 2012
CNN, "Stimulus amendment puts tough limits on executive pay," Feb. 14, 2009
Wall Street Journal, "Dodd's Amendment at Crux of Bonus Issue," March 19, 2009
FactCheck.org, "Mandel’s Deceptive Defense Against Sen. Brown," May 29, 2012
Sherrod Brown campaign, "Ad watch," May 23, 2012
PolitiFact, "Dodd failed to halt bailout bonuses, but he did limit future ones," March 20,2009
PolitiFact, "Wyden and Snowe wanted AIG bonus money back," March 18, 2009
FactCheck.org, "Bailout Bonuses Are Back," Sept. 16, 2010
FactCheck.org, "‘Blame Dodd’ Attacks Ignore Facts," March 19, 2009
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