Question---what role did the equity ownership clauses have in the financial rescue bill's defeat

On pages 36 - 38 of the draft of the defeated financial rescue plan released yesterday, there was an overview of the requirement that companies participating in asset sales give warrants or senior debt to the government as a quid pro quo. Warrants would have been required from public companies that had enough authorized stock in place to do so. Senior debt, "at a reasonable interest rate premium", would have been required from companies without enough authorized stock or from private companies. All definitions and parameters of these equity or debt give-ups to the government were left to future determination.

This part of the draft plan that was added as an essential requirement to get the support of the Democratic leadership and it was a questionable insertion. How would it be implemented. How would CEOs and Boards balance their fiduciary and legal duties to shareholders with the requirement to negotiate dilutive action with the Federal government---between a rock and a hard place comes to mind. How would the government manage its portfolio and determine its hold or sell decisions. Why should the Federal government own large parts of corporate America when the plan is designed to be a pool of assets that liquidates over time to pay for itself. Why would any company participate in the plan unless it was absolutely necessary.

It would be interesting to know how many congressmen who supported the initial Paulsen/Bernanke plan voted nay because of this Democratic initiative. Notwithstanding the last post here, few hands are clean on this one.