Democratic Rep. Jerry McNerney’s campaign has asked Comcast to pull the National Republican Congressional Committee’s new anti-McNerney television ad on the grounds that it is “false, misleading and knowingly misstates (McNerney’s) position on the issue of executive compensation.”
In response, the NRCC filed a complaint with the Federal Election Commission alleging that McNerney is violating campaign finance law through his campaign’s use of “volunteer legal counsel,” as indicated in the campaign’s protest letter to Comcast. The GOP argues that the legal work qualifies as an in-kind contribution from the Walnut Creek-based firm of Jerome Pandell but has not been disclosed as such.
Most of the ad’s content is a matter of opinion. The ad targets McNerney on high unemployment rates and his support of the $787 billion stimulus package, which most economists agree slowed but did not substantially reverse the downturn.
The NRCC is running ads in roughly 20 congressional districts, including a relatively small $44,000 media buy to air the McNerney spot. He is running against GOP nominee David Harmer of Dougherty Valley.
The McNerney campaign’s central objection, as outlined in Pandell’s Sept. 13 protest letter to Comcast, is correct. The comment that “McNerney gave away millions in bonuses for Wall Street’s failure” is wildly misleading. The ad refers to McNerney’s vote in favor of the American Recovery and Reinvestment Act, or economic stimulus package.
Contrary to the implication of the political spot, the legislation actually placed new limits on executive compensation. Here is the twist: Congress could not legally retroactively apply the new restrictions to executives working under existing contracts, and as a result, some Wall Street honchos collected obscene bonuses. It was disgusting but the stimulus package did not create nor enable the previously agreed upon bonus payouts. (Update: NRCC spokeswoman Joanna Burgos disagrees with me. See her response below.)
Here is the NRCC ad.
NRCC spokeswoman Joanna Burgos disagrees with the conclusion that stimulus package did not enable the payouts of the big executive bonuses. She hasn’t changed my mind but I told her I would post her response:
I just read your post and see that you wrote that the stimulus bill “did not enable” the bonus payouts. It absolutely did. The stimulus bill included a loophole that allowed AIG Executives to get bonuses, even after receiving bailout funds. Here is video of Dodd, the author of the loophole, admitting it: http://www.youtube.com/watch?v=flXSuexNlV8. If McNerney had read the full bill before he voted for it, he would have read the language that allowed all contractually-obligated bonuses that were agreed upon prior to Feb. 11, 2009 to go through. By voting for the stimulus bill, he voted to give the bonuses to the executives. For reference, here is the language of the bill and the amendment: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.txt.pdf. On page 404, it reads:
‘‘(IV) For any financial institution that received financial assistance provided under the TARP equal to $500,000,000 or more, the prohibition shall apply to the senior executive officers and at least the 20 next most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient.
‘‘(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.
My point exactly: The second clause acknowledges existing and valid contracts for which Congress could not legally void. Should Congress, including McNerney, have leaned on those companies and those executives to voluntarily surrender those contracts? Absolutely. I suspect he and a lot of other Democrats would love to rewind the clock on this issue. But as several major publications indicated, those employees were entitled to the bonuses under their contracts with or without this bill.