Senator Grassley on Controversial AIG Comments

Published March 18, 2009

| FoxNews.com

This is a rush transcript from "Your World With Neil Cavuto," March 17, 2009. This copy may not be in its final form and may be updated.

(BEGIN AUDIO CLIP)

SEN. CHARLES GRASSLEY, R-IOWA: The first thing that would make me feel a little bit better towards them, if they had followed the Japanese example and come before the American people and take that deep bow and say, "I'm sorry," and then either do one of two things, resign or go commit suicide.

(END AUDIO CLIP)

NEIL CAVUTO, HOST: All righty. That was Senator Charles Grassley's solution to the AIG bonus fiasco. He's since pulled back a little bit from that. But he's a man with a plan.

Senator Grassley, did you mean that?

GRASSLEY: Well, I think you're smart enough — I know you're smart enough to know rhetoric, but I am very sincere when I bring into the argument about corporate culture in America that it would do the taxpayers a lot of — make the taxpayers feel a lot better, it'd make me feel a lot better if our corporate structure would adopt that culture from Japan for the reason that I have not heard anybody apologize for running the corporation or the financial institution or the bank into the ground, and AIG is just one example of it.

Video: Watch Neil Cavuto's interview

I made this statement back in October. I have made it several times since then. I don't know why it caught on yesterday, but it did.

CAVUTO: Well, I wouldn't have taken a thing back, Senator. I admire your guts for saying it. And in Japan that is how they handle it, and better to resign than to face the alternative.

But let me ask you a little bit about the blame and responsibility go around. I mean, when AIG had that weekend massage retreat some months back, I was told by all you guys: We're doing to be watching them like crazy to make sure they never do this again, any extra dollars they get from us, the accountability will be stuck like Velcro. And yet they got this in there again. So either your colleagues, you know, just missed it, or they're stupid. What is it?

GRASSLEY: Well, well, I will admit that I and others missed it in October when that first bill passed. We put in there no golden parachute, no salary over $500,000. We didn't put in about bonuses. But even that was undercut by we thought we were doing it for taking the toxic paper out. It didn't apply to the liquid — liquefying the banks, and that's the direction that Paulson went. It should apply across the board, and it doesn't apply there.

Pardon me.

CAVUTO: It's choking you up, isn't it? This whole thing is choking you up.

But, Senator, the reason why I ask is this, that people are looking at this thing back at home and saying: Why should we give another dollar to a rescue, say nothing of how the institution rescued will waste it, abuse it, or just, you know, stink it away, when the folks in Congress can't even police it?

GRASSLEY: OK, can I finish the statement that I was coughing on?

CAVUTO: Yes, feel free.

GRASSLEY: And there was something in my throat. I wasn't coughing over the issue.

CAVUTO: Probably another bailout, but continue.

GRASSLEY: Two weeks ago — well, I'm going to try to avert Congress some responsibility, although we can't avoid total responsibility.

But two weeks ago, when the last $30 billion went out, there was a opportunity there when you had real leverage, if Geithner had used it, to find out about these bonuses, but it wasn't used, and then it becomes a political issue, and the president finds out how hot it is, and then he directs Geithner to go back and get it.

So that's what I want to throw in there for you, and now I forgot what you asked me.

CAVUTO: Well, it might be so, Senator, but these guys are playing you like a fiddle. And here's why I say that: I think that if you're a rescued institution or one considered too big to fail, and I guess when we spent better than 170 billion taxpayer dollars on AIG it must be too big to fail, they know that no matter what they do, their executives might be held up in ill regard, but you're not going to let AIG fold, and they know it, and they're like restless kids who keep challenging their parents, and the parents aren't really watchful, so they're going to keep doing this.

GRASSLEY: I think the point has been made even before this bonus issue that at the grassroots...

CAVUTO: Yes, lots of times.

GRASSLEY: ... at the grassroots of America, there's no stomach here in Congress reflecting the grassroots for another stimulus or another bailout. But we have to do more.

CAVUTO: OK. But, now, I had Hank Greenberg here yesterday, the former head of AIG, who said it stretches credulity to say that you wouldn't be aware of the bonuses when, in fact, this was decided on by the board, a lot of these were already paid out and they had nothing or any reason to hide it, that everything was above board, sneaky though as it appears to be, and so if you guys didn't open the file and see what they were doing, shame on you, not just shame on them. What do you say?

GRASSLEY: Well, here is again an excuse coming from a senator, but let me tell you that I was involved with setting up the special inspector general for the TARP, and that special inspector general, presumably, because he's a government official, is only able to go to the Treasury Department, get any information about AIG or any other institutions, and we should have made it possible, and we're working on that now, that they can go to the individual institutions as special inspector general to find out what the money's being used for and all these other things that could be connected with a bonus.

CAVUTO: Yes, but, you know, Senator, does it ever bother you that — this might surprise you: When I was a kid I crashed a couple of cars in my time. Not seriously. I don't want you to get the wrong idea. But every time I went back to my dad I would say, "I'm not going to do it again. Trust me, Dad. I will keep my eyes open when I go into the garage. I promise."

But I kept doing it. And there was a point at which my dad said, "You know what, Neil? I'm not going to give you that car, I'm just not. You can walk." Which, at the time, was actually good exercise.

My point is, are the American people, Senator, going to say, "You know what this stimulus thing, this rescue thing, I know you swear on a stack of bibles you're going to stop the nonsense, but we're going to stop giving you the money for the nonsense, because we're tired of it"?

What do you say?

GRASSLEY: Well, I — well, I think I have just answered that for you. Let me repeat it, from the grassroots of America and for the grassroots of America, that's my town meetings, I had 24 three weeks ago in Iowa, and I got the clear message that people don't see what we've already done working and don't do any more of it.

And I think it's getting through so clear that I'm even hearing Democrats in the Congress saying that now.

CAVUTO: Well, I know, but, yes, the umpteenth time you're saying it'll never happen, never happen, never happen, but, unfortunately, Senator, it keeps happening.

GRASSLEY: Well, I can vote against it.

CAVUTO: OK.

GRASSLEY: And, you know, I voted against GM. I voted against the second tranche. I voted against the stimulus bill.

CAVUTO: All right. Senator, we will see what happens.

I'm sure you're a good driver. All right, Senator, thank you very, very much.

GRASSLEY: Thank you.

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