Ensign questions Geithner's competence

WASHINGTON -- Sen. John Ensign this afternoon challenged whether Timothy Geithner should keep his job at Treasury Secretary in light of new questions of when the Obama administration knew of bonuses being paid to executives at bailed out insurance giant AIG.

Ensign said he was not calling for Geithner to resign, but he came awfully close.

"I think we are questioning competence right now," Ensign said. "We need to have folks focused and competent on fixing this economy, and right now there are some questions.

" I would ask the question, is this the kind of competency you want coming out of the secretary of Treasury?"

Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Thursday, March 12, 2009, before the Senate Budget Committee hearing on the economy. (AP Photo/Susan Walsh)

Sen. Harry Reid, D-Nev., is sticking by Geithner, a spokesman said.

"Sen. Reid believes he is doing a good job under the most difficult circumstances, which he inherited from the previous administration," Reid aide Jon Summers said in an email.

Ensign's comments came on a day when the AIG scandal turned wildly partisan, with Republicans seeking to blame Democrats for allowing the company to distribute $165 million in bonuses to executives, and for not policing the bailout.

The Nevada Republican pointed to news reports from last November that said AIG planned to pay bonuses to 130 managers, Geithner has said the administration only became aware of the bonuses last week.

One Republican focus was on a provision in the economic stimulus bill passed last month that set a Feb. 11 grandfather date exempting AIG and other firms receiving federal bailout funds from having to limit bonuses.

"That date was put in with no Repubilcans in the room," as Democrats controlled the final negotiations on the stimulus package, Ensign said. "The outrage doesn't just need to be at AIG...but there also needs to be some outrage at who allowed this stuff to happen."

Sen. Chris Dodd, D-Conn., later in the day said it was he who modified the provision, at the request of the Treasury Department.

AIG is receiving some $170 billion in federal funding to stay afloat while it tries to restructure itself, selling off assets to repay the government.

Democrats were preparing legislation to recapture some of the bonus money that has been paid. Meanwhile AIG chief executive Edward Liddy told a House committee he would ask employees to return some of the money.

Ensign called for the Senate Finance Committee to hold hearings on "who knew what when," and to call Geithner and other Obama administration offiicials to answer questions.


Contact Steve Tetreault@stetreault@stephensmedia.com or 202-783-1760