Category: Tait Militana
Norwalk Holds Its Own in Lobbying, But Available Money May Skew Numbers
LOBBYING
Norwalk Hour
Tait Militana
Boston University Washington News Service
04/22/09
WASHINGTON – Over the past year, Norwalk has done pretty well compared with bigger Connecticut cities when lobbying for federal dollars, but experts say that good fortune may not last.
Despite being the sixth most populous city in the state with a population of 83,000 and having a smaller lobbying budget than some of its neighbors, Norwalk and Norwalk-based organizations brought in more than $8 million in earmarked federal dollars in fiscal year 2008, according to Citizens Against Government Waste, a group that tracks federal appropriations. And in fiscal year 2009 Norwalk received $1,678,000 in earmarks.
One reason for the big difference between 2008 and 2009 funding is that in 2008 more than $5 million was earmarked for the dredging of the Norwalk Harbor.
Timothy Sheehan, executive director of the Norwalk Redevelopment Agency, which handles lobbying for the city, said he has been very pleased with what Norwalk has received for its efforts in Washington.
“Over the short period of time, I certainly feel very comfortable Norwalk has gotten its return on investment,” said Sheehan. “I think we’ve done very well.”
Several experts said the size of a city and the amount of money spent on lobbying do not necessarily determine how many projects receive funding, making it difficult to measure one city against another. Ultimately, Norwalk’s lobbying success may be as much a result of the kind of projects it is proposing, the economic times and the increase in available federal grant money, as it is the city’s lobbying efforts.
As the country moves out of the recession and reduces government spending through stimulus measures, experts said, Norwalk’s federal grants could dry up.
In 2008, Norwalk spent $80,000 on federal lobbying according to the Center for Responsive Politics, a group that tracks politics and money. Of the
$8,143,050 in earmark funding Norwalk received in fiscal year 2008, more than $5,608,800 million went to the harbor dredging project.
In comparison, Stamford spent $130,000 lobbying and received $7,346,840 in earmarks, of which $4 million was used for a restoration project of the Stamford Mill River.
For all of lower Fairfield County, the federal government budgeted more than $22 million in earmarks in fiscal year 2008, according to data compiled by Citizens Against Government Waste. For fiscal year 2010, which runs from Oct. 1 to Sept. 30, area cities are seeking nearly $100 million, according to requests filed on the Web site of Rep. Jim Himes, D-4.
David Grenham, a lobbyist for the Ferguson Group, which represents Stamford and Southington in Washington, said though it may look as though relatively small cities like Norwalk are getting great returns on their lobbying investment, it is difficult to actually measure success because so much depends on what money is available and how important the projects are.
“Size does not matter,” said Grenham. “What is really important is what the city is trying to get.”
According to Grenham, part of the reason that smaller cities are receiving significant government money is that there is simply more money out there and many have been very aggressive pursuing it.
In February, Congress passed the American Reinvestment Act, a dramatic expansion of domestic spending designed to stimulate the floundering economy.
Since then, Grenham said he has seen more towns seeking money for local projects.
“The stimulus has created incentives for local governments to think about federal funding,” he said.
Norwalk has nearly doubled its lobbying budget since 2006. Sheehan said the city’s 2009 lobbying budget is $90,000.
Mayor Richard Moccia said with more money available, the city has been more actively requesting funding.
“It puts you in a more competitive position,” said Moccia of the city’s increased lobbying efforts.
According to Sheehan, each year Norwalk city officials meet to develop a federal agenda or what funding they want to push for in Washington. Then the city presents its priorities to its lobbyist, Brown, Rudnick, who petitions government officials for appropriation requests. Based in Washington, the lobbyist’s job is to speak to lawmakers and request funding for town projects when appropriate legislation is being drafted.
These kinds of requests from lawmakers for funding for projects in their districts are known as earmarks.
Congressman Himes said he typically does a “sanity check” before signing off on appropriation requests to make sure the project is worthy and far enough along to warrant federal money. One recent request he said he decided not to pursue at this point is a waste-to-energy plant proposed for Stamford because he said upon review, “it became clear that more work needed to be done.”
Some days Himes said he meets with dozens of groups seeking federal funding and it is clear that people are aware there is more money available now as a result of the stimulus package.
“There is a real intensity that is probably different from what it has been in the past,” Himes said.
Norwalk leads Fairfield County in the number of appropriation requests for fiscal year 2010, seeking almost $40 million in infrastructure improvements, according to reports filed on Himes’ Web site, an amount almost equal to that being sought by Bridgeport and Stamford combined.
Nonetheless, not all towns have seen the results Norwalk has. Southington, a city of 42,000, spent $80,000 on lobbying last year and received only about $750,000 in federal appropriations.
The town decided not to continue its lobbying program in 2009.
Council Chairman John Barry said he did not feel it was appropriate to use taxpayer money to lobby in the current economic climate.
“The lobbying effort was something that was not successful,” Barry said.
David Giordano, a lobbyist with Panuzio & Giordano which represents Bridgeport, Waterbury, Norwich and Middletown, said the quality of the projects and how badly they are needed are larger factors in how much funding a city receives than how much money it puts toward lobbying.
“It’s not necessarily just dollars and cents,” Giordano said. “It’s about making a compelling argument about why this is important.”
According to Moccia the old industrial nature of Norwalk may explain why it has seen an influx of federal money in recent years. With infrastructure being a priority for the administration and many local towns, the interests at all levels of government are the same. He said that has created a great opportunity for Norwalk
“Now we have to work harder because there is more opportunity,” Moccia said. “It’s a responsibility.”
Girodano said this is an exceptional time when it comes to the amount of federal money available and that won’t always be the case.
“Considering where we are I think we have done well. But like any other city we would like to see more” federal money for projects, said Moccia.
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Shays Stamped Slogans on Willing Voters
TATTOO
Norwalk Hour
Tait Militana
Boston University Washington News Service
04/07/09
WASHINGTON – In a fierce campaign for Congress last fall, Republican Rep. Christopher Shays employed a bizarre but increasingly popular tactic to get his message under the skin of voters. He tattooed them.
Granted, the tattoos were only temporary.
Shays, who ultimately lost his reelection bid in the 4th District to Democrat Jim Himes, handed out nearly 5,000 fake tattoos of his name to willing voters. The tats mirrored Shays’ lawn signs with the words “Congressman Christopher Shays” inked in red, white and blue.
Shays was not the only politician to employ such skin-tingling promotion tactics last election. A New Hampshire congressional candidate, a Mississippi congressman and even presidential candidate Barack Obama also stamped voters with images of hope and prosperity.
Paul Cary, president of Tattoofun.com, a Web site that creates custom tattoos and the provider of the Shays and Obama body art, said he has seen demand for political tattoos explode in the last three years.
“Tattoos are the new buttons,” he said.
Cary did not have an official count for how many political tattoos he made during the campaign season last year but said it was several million. The tattoos range from $110 for 1,000 to $1,240 for 10,000, depending on size.
The Obama campaign alone ordered 400,000 tattoos, Cary said.
According to the Center for Responsive Politics, a Washington-based organization that tracks money and politics, the Shays campaign spent more than $600 on tattoos last year.
The campaign declined repeated requests for an interview, citing the ongoing investigation of a former campaign manager on embezzlement charges.
However, Jay Malcynsky, a political consultant with the New Britain-based Gaffney, Bennett and Associates, said he has seen dozens of strange political promotion items over the years and has come to the conclusion that politicians will put their name on pretty much anything that promises to promote their brand.
“There’s really no strategy to promotional items other than to buy what people will keep around,” he said in an e-mail message. Tattoos are “just another way to improve name ID and possibly image.”
Malcynsky said what is curious about the tattoos is their temporary nature. Ultimately, they wash off, which may limit their effectiveness.
“To the extent that people feel they are clever or humorous, they make a good, but short-term, impression,” he said. “Obviously, since they come off right away, they have no value as a continued reminder of the encounter with the candidate.”
According to Cary, the tattoos last up to seven days and eventual dissolve with water.
Bob Clegg, who ran for Congress last year from New Hampshire’s 2nd District but lost in the primary, also used tattoos. He said he geared them toward children and often handed them out at parades.
“We found kids absolutely loved it,” he said. “If we were entertaining the children, we had the parents' attention.”
Clegg, who purchased 2,500 tattoos, said they eventually became so popular that staffers began carrying them around in their pockets at all times.
The kids “have no idea what I do, but they know I have tattoos,” Clegg said.
Clegg also handed out bobblehead dolls of himself. He said part of the idea of the tattoos was to show that he did not take himself too seriously.
“Maybe it’s why I lost, but we had a ton of fun,” Clegg said.
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Himes’ Bill to Curb Bonus Payments Passes House
HIMES
Norwalk Hour
Tait Militana
Boston University Washington News Service
04/01/09
WASHINGTON—The House took major steps Wednesday to curb bonus payments to employees of companies such as American International Group, granting expanded powers to the Treasury Department to prohibit employee compensation it deems “unreasonable or excessive.”
The bill, which applies to recipients of federal money from the Troubled Asset Relief Program, would allow Treasury Secretary Timothy Geithner to establish performance-based guidelines that any future bonus payments would have to adhere to.
Rep. Jim Himes, D-4, who drafted the bill with Rep. Alan Grayson, D-Fla., said the legislation is necessary to protect taxpayer money.
TARP recipients, Himes said, “have a fiduciary responsibility to their shareholders. Like it or not, American taxpayers are now shareholders.”
The bill, which is the first Himes has authored, comes after outrage over $165 million in bonuses doled out to some AIG employees. In response last week, House lawmakers tried to implement a 90 percent tax on those bonuses, but the movement fizzled as the White House distanced itself from the legislation, asking Americans not to demonize all businesses.
The Himes bill would differ from the tax bill because it would not reclaim bonuses already paid to AIG employees. Instead, it would establish standards that could block future bonuses.
According to AIG CEO Edward Liddy, who testified before Congress last month, several employees have voluntarily given back their bonuses.
Himes, who voted for the bonus tax, said reclaiming the AIG bonuses is a separate issue. He said his bill is better than the tax because it would establish a single set of limits on bonuses.
“Someone within the government, which is now a major shareholder in many financial institutions, has to opine,” Himes said. “I’d rather it be the Treasury with its knowledge and expertise in the industry than 435 congressmen.”
Nonetheless, the bill received cold responses from Republican lawmakers, who had voted narrowly against last month’s House-passed bill. Republicans warned that the Himes proposal would grant too much power to the Treasury.
The House approved Himes’ legislation, 247-171, with Republicans dividing, 163 to 10 against the bill.
Rep. Virginia Foxx, R-N.C., said the bill was a veiled attempt to allow the government to control the salaries of employees at TARP recipient firms.
“The deception is that this is only for executives,” Foxx said. “It is not. It allows the Treasury to set salaries for all employees.”
Rep. Roy Blunt, R-Mo., said the bill would grant government influence in places it should not be.
“To try to tell these companies how to pay the people that work for them is not the right thing to do,” Blunt said.
Himes expressed disappointment that the bill was divided along party lines, but said protecting taxpayer dollars should be a goal of all lawmakers.
“The notion that compensation should be wired to performance should not be a partisan issue,” Himes said.
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Treasury Secretary Unveils Proposed Financial Rules
OVERHAUL
Norwalk Hour
Tait Militana
Boston University Washington News Service
03/26/09
WASHINGTON – Treasury Secretary Timothy Geithner unveiled a wide-ranging overhaul for regulating the country’s financial system Thursday that could give the government control over financial giants like the American International Group.
The proposals are in reaction to the banking crisis which has threatened the survival of financial institutions and wiped out trillions of dollars in investor wealth.
Geithner said the United States came into the financial crisis without adequate tools to handle it and vast regulatory changes are needed.
“To address this will require comprehensive reform,” Geithner said. “Not modest repairs at the margin, but new rules of the game.”
According to Rep. Jim Himes, D-4, the government must create a new government regulating body to make sure such a crisis never occurs again.
“If there is one thing we’ve learned, it’s that there are plenty of players that are capable of crashing the system,” said Himes of the banking system. “When an activity can crash the system we have a right to monitor it.”
Speaking in front of the House Committee on Financial Services, of which Himes is a member, Geithner outlined broad areas that the regulatory framework will cover. Included in the plan is the establishment of a single federal agency with responsibility for maintaining the stability of large institutions.
The proposed changes would also give the government the power to take over financial companies like AIG as it now has the power to do with insolvent banks.
Designed to weed out unnecessary risks to the country’s financial system, the agency would subject firms deemed to be too large to controls such as tougher capital requirements and greater oversight on borrowing.
Geithner said a single comprehensive regulator also would prevent companies from “cherry picking among competing regulators” as they do under the current system.
“The new rules must be simpler and more effectively enforced,” he said.
The plan, which requires congressional approval, would grant never-before-seen powers to the government, allowing it to more easily influence the financial system.
The administration’s goal with the new authority is to be able to prevent a repeat of the financial crisis surrounding AIG. The furor over the government bail-out of AIG peaked last week after a report that top executives had received $165 million in bonuses. The government plan also would for the first time place regulations on the derivatives market including credit default swaps, which AIG heavily traded driving the firm to near ruin.
Geithner did not specify where these powers would lie, but said the regulations would build on the model set by the Federal Deposit Insurance Corporation.
Several Republican members of the committee had cool responses to Geithner’s proposals. Rep. Scott Garrett of New Jersey said he worried the plan would give the government too much power without achieving its goals.
“The Federal Reserve itself was created to ensure that asset bubbles and panics sort of like we have right now don’t happen,” Garrett said. “But they do. Forgive me if I’m still a skeptic.”
Tuesday Sen. Chris Dodd, D-Conn., suggested the new authority be granted to a regulatory council made up of representatives from the FDIC, Federal Reserve and Treasury. He said such a system would provide the proper checks and balances.
“Overall the plan is consistent with the principles I've laid out,” Dodd said in a statement.
Himes said what department will be granted the regulatory powers is still an open discussion, but he is more concerned how the regulation will be shaped.
“I care more about what it looks like than where it lives,” Himes said.
At the G-20 summit meeting of industrialized nations to take place next week in London, Geithner pledged to build upon reforms in the United States with European partners, saying the country cannot move on by itself.
“We need to recognize that risk does not respect national borders,” he said.
According to Himes, the most important thing is that the new regulator be able to adapt and eliminate unnecessary risks.
“It is critical that the thing be flexible and adaptable, which are not words usually used to describe a regulator,” said Himes.
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Dodd Calls for Regulatory Council to Prevent Another AIG
REFORM
Norwalk Hour
Tait Militana
Boston University Washington News Service
03/24/09
WASHINGTON – As fury over American International Group bonus payments continued to boil around him, Sen. Chris Dodd, D-Conn., tried to push forward Tuesday on plans to overhaul the nation’s banking system, calling on lawmakers to consider a council of federal regulators that would oversee risk and end the concept of “too big to fail.”
Departing from his suggestion last week that the Federal Deposit Insurance Corp. should regulate systemic risk, Dodd said Tuesday that a council representing the Federal Reserve, the Treasury Department and the FDIC, among others, would provide the needed financial oversight without burdening one department with all of the responsibilities.
Sen. Susan Collins, R-Maine, introduced a bill last week that also proposed a federal regulatory council.
Dodd said placing a risk regulator within a single government agency might consolidate too much power in one place.
“I just don’t like the idea of the systemic risk regulator sort of talking to itself,” he said.
In a hearing at the Capitol, the Senate Committee on Banking, Housing and Urban Affairs, of which Dodd is chairman, continued its discussion with bankers on how to regulate financial giants whose failure would threaten the stability of the entire financial system. The panel met with insurance industry leaders on similar topics last week.
Dodd said any new regulator should look to community banks when creating policy because many of them have been able to weather the economic crisis.
“We must recognize that not all banks are responsible for this crisis,” he said. “Small-bank lending might well help lead the way out of it.”
William Attridge, president of the Connecticut River Community Bank of Wethersfield, said it was important to have several agencies checking each other on financial regulation.
“Congress should not establish a single, monolithic regulator for the financial system,” he said.
But not every witness agreed that additional federal regulation was a good idea. Christopher Whalen, managing director of Los Angeles-based Institutional Risk Analytics, said regulation should include state as well as federal agencies.
There is no good way for the federal government to oversee all aspects of financial risk, Whalen said. “There is no God’s-eye view.”
Throughout the hearing, AIG never strayed far from the conversation.
Whalen said an important part of eliminating excessive risk is eliminating the credit default swaps that led to AIG’s near collapse. He took issue with the argument that AIG and other financial giants were too big to let them fail, saying that letting AIG fail would not have ended the world but it would have eliminated the credit default swaps.
“I pray to God we find the courage to put that company out of its misery and into bankruptcy. where it should have been six months ago,” Whalen said.
According to Dodd, part of what led to the near failure of AIG and the economic crisis in general was a perception that protecting the consumer stifled business. He said future regulation must reverse that trend.
“We cannot afford to consider a so-called systemic risk regulator without also considering how we can better protect the consumer,” Dodd said.
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Financial Overhaul Moves Forward as AID Anger Continues
AIG
Norwalk Hour
Tait Militana
Boston University Washington News Service
3/19/09
WASHINGTON – In the face of outrage surrounding his role in legislation that allowed AIG to dole out millions of dollars in executive bonuses last weekend, Sen. Chris Dodd, D-Conn., moved forward Thursday on reforms to the country’s banking system, calling for federal oversight so never again will an institution be “too big to fail.”
Dodd said the Federal Reserve may have too many regulatory responsibilities to handle the addition of a systemic regulator to weed out institutions whose failure could cause larger damages to the financial system. Instead, he suggested the authority lie with the Federal Deposit Insurance Company, a government institution that backs deposits in member banks.
“If the events of this week have taught us anything, it is that the unwinding of these institutions can sap both public dollars and public confidence,” said Dodd.
In a hearing at the Capitol, the Senate Committee on Banking, Housing and Urban Affairs, of which Dodd is chairman, heard testimony from industry leaders seeking to reinvent the financial regulatory system. All seven witnesses said additional oversight of the financial industry is necessary though several differed in their opinion on how it should be done.
Joseph Smith, North Carolina commissioner of banks, said rather than having a purely federal regulator the authority should be split between state and federal supervision because it will provide more checks and balances.
“An appropriately coordinated system of state and federal supervision and regulation will promote a more effective system of financial regulation and a more diverse, stable and responsive system,” Smith said.
Opponents argued this may allow too many cracks for large, diverse corporations such as AIG to slip through without adequate regulation.
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Sen. Dodd: It Wasn’t My Idea to Allow Bonuses
DODD RESPONSE
Norwalk Hour
Tait Militana
Boston University Washington News Service
3/19/09
WASHINGTON – Following days of attacks from Republican lawmakers over language that allowed bonuses to be paid to AIG employees, Sen. Chris Dodd, D-Conn., fired back Thursday evening, saying the Treasury Department requested the changes to protect bonuses and that they seemed “almost technical in nature at the time.”
“It wasn’t my idea, my proposal, my suggestion,” Dodd said in a conference call with Connecticut reporters. “It came from the administration. They gave us no indication whatsoever that these were related in anyway to AIG and I agreed to those changes.”
Dodd’s response came after days of denying he had anything to do with the legislation early in the week. He later admitted Wednesday that he had in fact authored the amendment to restrict bonuses and knowingly diluted it at the behest of the administration. According to Dodd, the mixed messages were a misunderstanding.
“I regret deeply that this matter has become confused,” Dodd said.
The language added a loophole to an amendment in the stimulus bill that would have restricted bonuses paid to employees of companies that had received funds from the Troubled Assets Relief Program. Dodd said he did not know who requested the changes, but it was someone at the staff level in the Treasury Department.
Treasury Secretary Timothy Geithner told CNN Thursday that his department requested that Dodd change the amendment out of fear that numerous lawsuits would follow because the bonuses were contractually guaranteed.
Several House Republicans jumped on the controversy, saying Democrats were irresponsible in crafting the bonus modifications and should have known the potential consequences.
U.S. Rep. Joe Wilson, R-S.C., said, “Democrats wrote the bill alone, secretly and yet they act surprised.”
Rep. John Boehner, R-Ohio, the House minority leader, said the controversy proved that Democrats moved too quickly on the stimulus bill, forcing it upon Congress without proper revision.
“It’s pretty clear not one person read [the stimulus bill],” Boehner said in his weekly legislative address.
Dodd said had he known the change would have let taxpayer money go to executive bonuses at AIG, he would not have accepted it.
“Had I known at the time that there were any AIG bonuses involved – that this was somehow going to assist in this matter – I would have rejected it completely,” Dodd said.
He also said he would return any campaign contribution from AIG employees who have received bonuses.
Dodd also addressed concerns that the controversy would hurt his chances at reelection, saying it is something that he cannot worry about. Republican Rob Simmons, who represented the 2nd District in the U.S. House until being defeated by Joe Courtney in 2006, announced this week that he would challenge Dodd in 2010.
“If I sat there everyday and worried where polls were, then you couldn’t do this,” said Dodd. “I can’t function that way.”
Dodd also said he supported a motion to implement at 90 percent tax on the AIG bonuses passed Thursday by the House 328-93. He said while his preference would be for the employees to voluntarily give back their bonuses the government must get as much back as it can
“I’m in favor of whatever surcharge we can get away with,” Dodd said.
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Himes Says Government Should Go After All AIG Bonuses
AIGSIDEBAR
Norwalk Hour
Tait Militana
Boston University Washington News Service
03/18/09
WASHINGTON – American International Group’s request that employees voluntarily give back at least half of the $165 million in bonuses paid to them last week is not good enough, said U.S. Rep. Jim Himes, D-4, following testimony by the company’s chief executive at the Capitol Wednesday.
Edward Liddy, AIG’s embattled CEO, testified before the House Committee on Financial Services, of which Himes is a member. He said though the bonuses may have been “distasteful,” they were necessary to keep top employees onboard.
“I think he made a bad decision,” Himes said. “If AIG can’t figure out a way to get the money back, the government will.”
Himes said he recognized that the bonus contracts were developed by Liddy’s predecessors and applauded his willingness to testify. However, Himes said, government intervention, such as imposing a heavy tax on the bonus payments or deducting the amount from future bailout funds for AIG, should be a last resort. He said he would like to see the company hire lawyers to fight the contracts or persuade the employees that they have a moral obligation not to take the money.
“Given the severity of [the economic crisis], we just can’t tolerate these payments,” Himes said.
In a tense moment at the hearing, Rep. Barney Frank, D-Mass., the committee chairman, called on the panel to subpoena the names of the employees that received bonuses. Because of death threats to several AIG employees, Himes said, the request represents a security concern, though the public has a right to know.
Frank and Liddy pledged to continue negotiations.
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Local Insurer: Fed Regulator No Answer to Outrage over AIG
INSURANCE
Norwalk Hour
Tait Militana
Boston University Washington News Service
3/17/09
WASHINGTON – Outrage over bonuses paid to executives at the American International Group spilled over at a Senate hearing on insurance regulation Tuesday, while industry leaders sought to install a federal regulator to prevent future systemic failures.
Following a weekend report that $165 million in bonuses had been paid from taxpayer money used to prop up the insurance giant AIG after its near collapse, Sen. Chris Dodd, D-Conn, demanded answers from the Federal Reserve about how it tracks the federal rescue funds that have already gone to AIG and other financial industry recipients.
“The American people are outraged, and so am I,” Dodd said. “We also want answers regarding where the Fed has been on conditions for these types of bonuses since this rescue effort first began.”
Sen. Jon Tester, D-Mont., said AIG’s use of taxpayer money for bonuses is unacceptable and the company would be broke if the American people had not bailed it out.
“If this is the way Wall Street and AIG and all of the others continue to do business, we can’t help them with any amount of money,” Tester said. “This is ridiculous.”
The Senate Committee on Banking, Housing and Urban Affairs, of which Dodd is chairman, met with insurance leaders on how to modernize the insurance regulatory system.
In light of AIG’s near failure, several witnesses called for a federal regulator to oversee the insurance industry and help prevent collapses like the one AIG faced last year.
William Berkley, the CEO of W.R. Berkley Corp. in Greenwich, said the current system, in which each state independently regulates its own insurance market, lets too many companies like AIG slip through the cracks.
“The state-based insurance regulatory structure is inevitably fragmented and frequently not well-equipped to close the regulatory gaps that the current crisis has exposed,” Berkley said.
However, critics of a federal regulatory system say that AIG was an anomaly and cannot be considered for federal regulatory reform because it is too large and spans too many industries.
According to Dodd, there are nearly 4,000 insurance companies in the country. He said diverse international companies like AIG represent only a small percent of the industry.
“What happened at AIG should not, in my opinion, be confused with the industry with which it is most closely associated, the insurance industry," Dodd said.
Spencer Houldin, president of Ericson Insurance Advisors in Washington Depot, said at the hearing that insurance has been hurt less by the financial crisis than many other industries have. He said the industry is sound and major changes to the regulatory system are not needed.
“Unlike other financial services markets, the insurance market, particularly property-casualty, is stable and does not need risky indiscriminate change of its current regulatory system,” Houldin said.
According to Houldin, the problem with AIG was its overseas gambles with credit default swaps that a federal regulator would not be able to catch anyway.
“Federal regulation isn’t the panacea,” he said.
Dodd said the immediate issue is trying to get back the bonuses paid to AIG. He expressed disappointment that the restrictions on bonuses and other compensation under the Troubled Asset Relief Program do not apply to the money the Fed distributed to AIG.
“We wrote restrictions on executive compensation at the time, and the idea that this wouldn’t apply to money coming out of the Federal Reserve is a sore point, to put it mildly,” Dodd said.
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Finance-Strapped Volunteer Programs May Hinder Sen. Dodd’s Service Initiative
VOLUNTEER
Norwalk Hour
Tait Militana
Boston University Washington News Service
03/03/09
WASHINGTON – Lawmakers need to do more to help ensure the survival of community service programs and nonprofit organizations in the wake of the economic crisis, Connecticut volunteer leaders said.
Though they applauded recent initiatives to increase volunteers nationwide, they said in a series of interviews, the initiatives will have little effect if there are few programs left for the volunteers to join.
Michael Johnston, CEO of United Way of Western Connecticut, said he worries that the economic situation and state budget cuts will leave little money for nonprofits and volunteer organizations, forcing them to cut back on services.
“We are not entirely sure the nonprofits are going to get through this very difficult time,” Johnston said. “We certainly worry that there will be challenges in the next few years because this is as bad as we’ve seen it.”
Last week, Sen. Chris Dodd, D-Conn., introduced four bills to create incentives for people of all ages to volunteer in their communities.
The bills, promoted with Rep. Rosa DeLauro, D-3, who will introduce companion legislation in the House, will expand funds for grants and awards to make education more affordable for volunteers.
Co-sponsored by Sen. Thad Cochran, R-Miss., the legislation includes the Semester of Service Act to offer academic credit to teens for service done during the school year, the Summer of Service Act to provide a $500 educational grant for students who volunteer during the summer between middle school and high school and the Encore Act to offer $1,000 educational scholarships for citizens 50 and older who volunteer 250 to 500 hours per year with local non-profits.
A final bill, known as the Action Act, would increase educational awards for AmeriCorps graduates from $4,725 a year to $6,585, with subsequent increases each year during the four years of college.
However, Ronald Cretaro, executive director of the Connecticut Association of Nonprofits, said rather than creating incentives to persuade more people to volunteer, it is better to make sure the programs that currently exist are financially able to continue operations.
Volunteer programs and nonprofits “are going to be faced with further cutbacks or packing it in,” he said. “I would like to see more initiatives out of the government to help make sure nonprofits are going to be around in a couple years.”
In the past two months two nonprofit groups in Fairfield County have closed because of financial problems associated with the poor economy. The Safe Neighborhoods AmeriCorps Partnership, a Bridgeport-based program that fought to reduce crime and violence, was discontinued in January because the program could not raise enough to match federal grants.
Last month, Dress for Success Mid-Fairfield County, a program that provides professional attire for disadvantaged women based out of Fairfield, suspended its services because of financial challenges and economic uncertainty, according to its Web site.
A spokesman from Dress for Success was not available for comment.
Thyda Korng, a former Bridgeport AmeriCorps program director, said though she is happy that there has been a call for public service from Washington, she is disappointed that her program could not be included in the volunteer expansions.
“It’s about the many people who had their lives changed by the program,” Korng said.
AmeriCorps is in the preliminary stages of creating a new program in Bridgeport, Korng said.
According to Dodd, the programs closing around the country present a problem for his plan, but there are other ways for people to help out. He said it is important now more than ever to volunteer because so many people are suffering.
“The need now is greater than it has ever been,” Dodd said. “There are still churches and community organizations and ways for people to plug into those.”
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