Doddgate:

LA Times January 8, 2010

a provision that he inserted into the stimulus bill last year capping the compensation of executives at companies receiving taxpayer money. At the behest of Obama administration officials, Dodd modified his amendment to exclude bonuses from contracts that were signed before passage of the legislation. That allowed financial services company American International Group to dole out $165 million in bonuses to executives in a division that had played a central role in the banking system's collapse. Dodd became a focus for national outrage as a result, yet if he hadn't modified the amendment, the bill probably would have been unconstitutional.

Far more troubling was Dodd's relationship with mortgage lender Countrywide Financial, which appears to have given him a sweetheart deal on a pair of loans under a VIP program called "Friends of Angelo," named for former Countrywide CEO Angelo Mozilo. Though Dodd was cleared of wrongdoing by the Senate Ethics Committee, he should have known better than to accept special terms from a company whose regulation he oversaw. And then there was Dodd's cottage in Ireland. After buying a third of a 10-acre island property in partnership with businessman William Kessinger in 1994, he bought out Kessinger's share in 2002 for a fraction of its worth, then underreported the value of the cottage on Senate disclosure forms. This failure to properly account for what looks very much like a gift from a wealthy acquaintance is similar to the shenanigans that ended the political career of Republican Sen. Ted Stevens of Alaska.

AIG Financial Products CEO Joseph Cassano urged his top executives to donate to the man in line to become chairman of the critical Senate Banking committee. It didn’t hurt that Dodd was also home state senator for the Wilton, CT.-based unit.

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“As he considers running for president in 2008, Senator Dodd has asked us for our support with his re-election campaign and we have offered to be supportive,â€쳌 Cassano wrote in a Nov. 17, 2006 email to his top executives, according to the Washington Times.

The executives were asked to write checks for $2,100 from themselves and their spouses. They were also supposed to pass on the message to members of their management teams, according to the Times.

Cassano’s entreaty got results: In the next few weeks, Dodd’s campaign received $160,000 from the Financial Products group. Besides Cassano, those writing checks included executive vice presidents Alan Frost, David Ackert, Douglas L. Poling, Jake DeSantis, Jon Liebergall, Robert Leary and William Kolbert.

Dodd’s relationship with the teetering insurance giant has come under increasing scrutiny since he acknowledged he had inserted the provision in recent bailout legislation that authorized the bonus payments, after initially denying he had any role. Dodd insisted, however, the Treasury Department had asked him to do it because of concerns about lawsuits.

In a subsequent statement, Dodd said he had no idea the legislation would impact AIG. “Let me be clear - I was completely unaware of these AIG bonuses until I learned of them last week,â€쳌 he said.

The March payment of an estimated $165 million in bonuses to AIG executives ignited a political firestorm, spurring the House to pass a huge tax on the bonuses, and putting the career of the longtime Connecticut senator in potential jeopardy.

Dodd - who was the top recipient of AIG donations from 1989-2008, according to the Center for Responsive Politics - is being hammered for being too cozy to Wall Street and faces the first significant political challenge since he was elected in 1980.