WASHINGTON — Two weeks ago, it looked inevitable. But a Wall Street lobbying blitz helped derail a near-total tax on bonuses for executives at AIG and other bailed-out companies.
Financial companies scrambling to protect their executives’ bonuses flooded Capitol Hill, the White House and the Treasury Department with tales of the dire consequences that could follow enactment of such a measure: Innocent middle managers targeted with punitive taxes. The economic recovery undermined. Consumer credit in a deep freeze.
The moment Capitol Hill hallways began buzzing last week with word of the tough anti-bonus legislation — on the heels of populist anger at AIG’s payment of $165 million to executives — e-mails began streaming in to senior congressional aides charged with drafting financial services and tax-related measures. The e-mails warned them away from such a bill, several aides told The Associated Press on condition of anonymity because they were not authorized to disclose the contacts.
But within days, a major Wall Street trade association asked its 650 member companies, which include AIG subsidiaries as well as bailed-out Bank of America and Citigroup, to barrage Congress with letters and phone calls pleading with lawmakers to kill it.
The group also distributed talking points that members could use in telephone calls to lawmakers. One argued the bill would scuttle Obama’s new plan to have investors help move toxic assets off the books of troubled banks.
