WASHINGTON - US SENATE Banking Committee Chairman Chris Dodd said on Wednesday he was responsible for a legislative loophole that let AIG pay executives US$165 million (S$250 million) in bonuses, but that he acted at the behest of the Obama administration.

'We wrote the language in the bill to deal with bonuses, golden parachutes, excessive compensation - executive compensation, that was adopted unanimously by the United States Senate in the stimulus bill,' Senator Dodd, a Connecticut Democrat, told CNN.

He said the administration sought changes in the amendment that aimed to curb executive compensation at AIG and other firms accepting government bailout funds.

CNN, citing a Treasury official who spoke on condition of anonymity, said the Treasury Department had raised concerns the government would be sued if it prohibited companies like AIG from honouring bonus contracts.

'I didn't negotiate with myself,' Sen Dodd said. 'I didn't write at my own behest. I was being sought out and asked to modify this, with the alternative, candidly, being losing the amendment itself.' -- REUTERS

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