Yesterday, Kay went on MSNBC's Hardball to condemn AIG for giving bonuses after taking bailout money (link). Excerpt follows:
BRZEZINSKI: I want to bring in your colleague, Senator Kay Bailey Hutchison of Texas. And Senator, thank you very much for joining us. Let‘s try the other side of this. We have been talking a lot today on this network to “The New York Times‘s” Andrew Ross Sorkin, who‘s going to be joining us later in the show. He writes in today‘s “New York Times,” “It doesn‘t seem fair. So here is a sobering thought. Maybe we have to swallow hard and pay up partly for our own good. But what about the commitment to taxpayers? Here‘s the second, perhaps more sobering thought. AIG built this bomb and it may be the only outfit that really knows how to defuse it.”By the way, does anyone else sort of have the hots for Mika Brzezinski, not to be confused with John Miklaszewski or Coach Krzyzewski?
And I would add to that, Senator Hutchison, aren‘t we all a part of this? Isn‘t some of this outrage a little disingenuous?
SEN. KAY BAILEY HUTCHISON (R-TX), BANKING COMMITTEE: Well, I think that, you know, many of us were not privy to the contracts. I do think there should have been much more due diligence at the first time and then at the second opportunity, and then most recently.
And I don‘t buy that we just can‘t do anything about it. I agree with the people who say, first of all, they should voluntarily not take these bonuses. Remember, even Hank Greenberg didn‘t take his bonus after 9/11 because we were in financial straits and our economy had been hit very hard. At AIG, he refused about a $5 million bonus. You know, that‘s the kind of spirit I‘d like to see here. I‘d like to see them voluntarily step up and say, I understand that this is something the American people didn‘t intend to fund.
And they‘re lucky to have a salary. They‘re lucky to have a job, and they ought to be working to get AIG back in the black.
BRZEZINSKI: Senator, are you with your colleague, Senator Menendez there, as well as Chuck Schumer, that if they don‘t give the money back, Congress will move forward to tax them 100 percent so the money gets back some way, somehow?
HUTCHISON: Yes. I do think that we should take action. I think they should know that we will take this action. And I think it should apply to others who are taking federal stimulus money, as well. When money is misspent, I think if our only lever is taxes, or maybe it is you return the money or you‘re out of a job, that‘s another piece of leverage that could be used. But I think this is something we can‘t just sit back and say, Well, we can‘t do anything about it. I think there are some things we can do.
[JUMP]BRZEZINSKI: All right, Senator Hutchison, what do you think should happen to AIG? What especially in light of these bonuses and the outrage that seems to go all the way up to the top to the president of the United States?
HUTCHISON: I just think there need to be clearer rules, Mika. I don‘t want to bring down the entire insurance industry. I think there are large global ramifications to that. So you do want to have an insurance component here. But I do think we need to have much clearer rules when we‘re in this government bail-out.
I mean, you know, Rick Santelli talking about millions, why not talk about billions and trillions? I think we are losing sight of the picture here that we can‘t just be talking about billions and trillions of dollars as if it were $1,000 or 20 cents. This is real money that eventually we are going to have to pay back, or at least bring the debt in line. And I think we‘ve got to step back here and have rules that apply to all of the financial institutions and to AIG and similar organizations.
BRZEZINSKI: Well, you talk about similar organizations. I couldn‘t agree with you more. I‘m just—in the grand scheme of things, I‘m looking at these AIG bonuses, and as Rick Santelli pointed out, I mean, they‘re a small portion of the bigger problem. There are companies out there where you have executives who, it appears, snuck bonuses through right before the company went down and was bailed out by the government.
It seems to me I would be more outraged by that behavior than a bunch of bonuses given out to several thousand employees that add up from $1,000 to $19,000.
HUTCHISON: You know, I think there has not been enough oversight here and not enough rules to start with. And if we have learned anything—I mean, and I will start back from September of last year. Mistakes were made. But I think not learning from those mistakes is a huge mistake. And we‘ve got to step back and say, There will be rules for this. Here are the rules. It‘s not business as usual anymore until we get over this crisis and we‘re back into a system that we know has regulatory reform that makes it work. And I think we‘re going to have to do special things.
BRZEZINSKI: All right. Let‘s pan back. Bottom line. Yes or no from you both. Senator Bob Menendez and Kay Bailey Hutchison, will that money from AIG—will those bonuses be recovered?
MENENDEZ: They‘re going to be recovered, 100 percent.
BRZEZINSKI: All right. Senator Hutchison?
HUTCHISON: I believe so, but I never want to predict fully anything that happens in Congress. But I do believe that the sentiment is there. We‘ve just got to find the legal way to do it, if they don‘t come up with a volunteer program, which would be my first choice.
No wonder Poland is always invaded by Russia and Germany. They spend all their time spelling each other's names. Kills their productivity (kind of like this blog).
But I digress.
Rick's big push is to paint Kay as an agent of Washington bailouts. He started a website called NoGovernmentBailouts.com. He talks about it all the time. Heck, he even rejected the unemployment part of the stimulus package, which has dominated Texas political news ever since. There is no doubt bailouts will be a campaign issue in a Rick vs. Kay race.
As far as AIG goes, it seems pretty clear that Kay is trying to innoculate herself against charges that she voted to bail out AIG (link) and therefore their bonus scandal must be tied to her. How much can she distance herself from her bailout votes? My thoughts are that conservative partisans may be lenient on her if Big John and other conservatives have the same voting record.
Rick has the convenience of not having had to take those tough votes last year, but he was outspoken very early and very often against bailouts in general. Rick also has distinguished himself as one of very few Governors around the country willing to reject stimulus money with strings attached, while Kay sort of kind of criticized him for making that move. All of this plays right into the black and white dichotomy the Rick people would like to paint in this race: Rick is a Texas conservative, Kay is a Washington RINO.
Is that a fair dichotomy? That really doesn't matter if it sticks. By denouncing AIG's bonuses and talking about the possibility of taxing AIG employees 100% on their bonuses, Kay is trying to keep her vote on AIG and the "Kay Bailout" label from sticking.