Ensign questions Geithner’s competence

WASHINGTON -- Sen. John Ensign on Wednesday challenged whether Treasury Secretary Timothy Geithner should keep his job in light of new questions about 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 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?' "

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 e-mail.

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 November news reports 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 Republicans 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 and sell 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 officials to answer questions.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@ stephensmedia.com or 202-783-1760.