Fred Thompson on AIG Nightmare

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This is a rush transcript from "Hannity," March 19, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Tim Geithner's days as treasury secretary may be numbered, and it looks like Senator Chris Dodd is not far behind. Now both men today claiming responsibility for their role in the AIG bonus scandal, after spending the last few days giving the American public contradictory explanations, or, as I call them, lies.

And that is our headline this Thursday night, day number 59 of the Obama presidency. That's "Blatant Dishonesty." Now remember all the outrage earlier this week from Democrats over AIG bonuses. Now the very same bonuses that they voted for in the massive stimulus bill. You know? The one that they never read? And the one that they, in a panic, voted to take away earlier today?

Well, it all came to a head, and the guilty parties finally now come forward. Now this past Tuesday, a timeline was released, saying that Tim Geithner only heard about the bonuses on March 10, and after today's mounting pressure, Geithner had this to say, quote, "On Tuesday, I was informed about the full scale and scope of these specific bonus problems. You know it's my responsibility. I was in a position where I didn't know about this sooner. I take full responsibility for that."

• Video: Watch Sean's interview

Well, that's not exactly true.

Now let's get to Chris Dodd, the pride of Connecticut initially said he had nothing to do with the bonus scandal, even though the loophole that allowed executives to receive their million-dollar bonuses was called, yes, the Dodd amendment. And yesterday, Dodd tried to fess up for his actions, which include authoring the same loop hole.

But it appears that Dodd fessing up means, well, passing the buck. He then went on to blame the Obama administration for the mess, going so far as to imply that they intimidated him into allowing the bonuses. Take a look.

(BEGIN VIDEO CLIP)

CHRIS DODD, D-CT: I'm not negotiating with myself. I would have been happy to have my language be adopted by the conference report. But as many know, the administration was — among others, was not happy with the language. Wanted some modifications to it.

They came to us, staff, and ask for changes. I don't know the individuals who were representing the Treasury at the time. Well, administrations, obviously, the veto power of an administration certainly strong. No one suggested a veto to me. I don't want to imply that to you, but certainly that's not an insignificant tool. AIG was never mentioned at all even at my staff or anyone.

(END VIDEO CLIP)

HANNITY: So the big question tonight is will Timothy Geithner or Chris Dodd be fired?

Joining us with reaction is former Tennessee senator, host of "The Fred Thompson Show," Fred Thompson is with us.

Senator, good to see you.

THOMPSON: Good to see you, Sean.

HANNITY: All right. Look, both guys, Dodd, Geithner, and the White House, are all feigning outrage. On St. Patrick's Day this week, Dodd said he had nothing to do with the Dodd amendment. And then Tim Geithner said, well, I didn't find out about it. The White House said, well, March 10. Now we find out that they both knew about it much sooner. They both lied.

THOMPSON: Yes.

HANNITY: Is that your interpretation?

THOMPSON: Yes, I don't think there's any question about it. I think that's the real scandal here, one of them anyway. One of the cover-ups. The other one is where the money was going that they were sending through AIG, and funneling abroad and elsewhere.

But focusing on this one for a minute, I think clearly the administration knew about last year, the Fed knew about a year ago, apparently, and it's not like they don't talk to the Treasury. And of course, Geithner was head of the operations that supervised AIG when they took him over, so they had to know.

When I see Geithner this late date say something like I didn't know the full scale and scope, I know he needs a good cross-examination. I hope someone gives him that. Of course, he didn't know all the details of every aspect of the business, but he had to know about the bonus plan, and they had to pass off on it.

Not only did they agree to it and pass on it, they got with Dodd, as you pointed out, and figured out a way to save it in that last bill, and then feigning outrage when it all came to light. You know, it is — it was a blown cover-up. I hold Chris no animosity. I feel badly about this, but he got caught in a flat-out lie, and just at a time when you think the American people can't get any more cynical, I think they are.

HANNITY: Yes, well, and I — they can't get anymore cynical because all the feigned outrage, they were all shocked earlier this week. They all denied having any knowledge of this.

THOMPSON: Oh yes.

HANNITY: And you know, now we have learned, you may be interested to know.

THOMPSON: Now they're parsing words. Now they're parsing words.

HANNITY: Well, parsing words, I mean what's that — look, what's frustrating here, Senator, is we are losing people's retirement. Elderly people now going back to work. This is the childhood fund that people saved for decades for their kids. You know what, so this is a little more serious than a bunch of bureaucrats in Washington, you know, parsing their words to save their political careers.

It gets me and a lot of other Americans pretty angry.

THOMPSON: Well, that's why I mentioned the cynicism, Sean, because underlying the economic problem is a lack of confidence in our system. There's a lack of confidence in our economy. We've got a president who, up until just very recently, was talking down the economy and thinking — saying the world was going to come to an end when he was trying to get his almost $1 trillion stimulus package passed.

You know, nobody has got faith in an administration that can't come up with a plan to save the financial system.

HANNITY: All right, so...

THOMPSON: And people are going to keep their money under the mattress until they have that confidence, and when they see that people in the administration are not being frank with them about relatively — some people might say minor things — then they don't have any confidence in them with regard to anything else.

HANNITY: Will they ever have any confidence unless Tim Geithner is fired?

THOMPSON: Sean, you know, the unfortunate truth is, I've checked around about this. I don't think there's anybody to take his place. I don't think there's anybody...

HANNITY: Senator, Senator.

THOMPSON: I don't think...

HANNITY: In all of America?

THOMPSON: Let me — no, I'm talking about somebody who Obama would pick who would be any better philosophically than Geithner is who would take the job. Now, think about those qualifications. I mean obviously, you can find somebody who take the job. But a left-wing radical liberal that Geithner is not, or somebody who would take the job.

I don't see any — certainly, nobody at Treasury right now, and I don't see anybody — I don't think Volcker, somebody like Volcker, I don't think he would take that job in 1,000 years. So, you know, I think, I...

HANNITY: Senator...

THOMPSON: I'm concerned. You know, I'm concerned about the country. I don't think the guy ought to be there, shouldn't have been there. He's in over his head, but I don't see any alternative.

HANNITY: Well, maybe it's time to put partisanship aside. Maybe it's time to not look for the left-wing radical, that's going to advance the agenda and maybe it's time to find somebody who's going to competently instill some faith and trust again in the financial system and Wall Street. Now...

THOMPSON: Wouldn't that be nice? Wouldn't that be nice? I have seen no indication of that in any of this.

HANNITY: All right. The inspector general, by the way, is now going to investigate this, and we're told late this afternoon that he wants to know who knew what, how, when, and why, arguing that this agreement back in November between the Treasury and AIG included specific references to the bonus payments.

I think that's fair. I think the American people have a right to know. Do you think that's the right thing to do?

THOMPSON: I think they already know. Sure, you ought to look at it. People know what the deal is. People know what the deal is. They — you know, they lied about it. They lied — instead of coming forward and making a case, saying, look. We're up against it here now. There are few people over there with, although they could, you know, you could say they ran the country into the ground and they probably did, we need a few of these guys, and we need to pay them.

So let's argue about it. Let's debate it. Let's — maybe knock the payments down sum. Let's maybe don't keep quite as many as you want to keep.

HANNITY: Yes.

THOMPSON: Let's put it out there. Let's be transparent. Remember that word? But they didn't do that.

HANNITY: Last question...

THOMPSON: They lied about it, and everybody knows that now. They can investigate it for another year, and they'll still know they lied about it.

HANNITY: Well, you know what, that pretty much sums it up. What did you think of the vote that took place today, you know, again, all the feigned outrage, we're going to take that money back? I'm a little nervous. If the government can target one individual because they don't like them, and we'll get into this in our next segment, that's bad for America.

THOMPSON: Well, keeping with my cheery attitude tonight, Sean, I'll say this, that I think it's a disgrace. This is a disgrace. They're sworn up — I don't care what you think about the bonuses. That's a side issue. They're sworn to uphold the constitution over there and they clearly violated it. I mean it's a bill of attainder. It's probably a violation of the takings clause in the constitution.

You can't focus in on one group of people for something that wasn't a criminal act and make it something subject to penalty after the fact. It's in the constitution. They know that. They went ahead and succumb to public opinion or what they think public opinion is.

HANNITY: All right.

THOMPSON: I think it's shameful.

HANNITY: I think it's shameful and we're going to have more on that in just a minute.

Thank you for being with us, Congressman.

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