Who will take the fall for AIG Bonuses?

Who would have thought 55 days into this administration we would be asking the question, what did he know and when did he know it? Word that a provision in the stimulus bill gave the green light for AIG to hand out bonuses using taxpayer money sent the media bloodhounds hot on the trail of whoever is the culprit. For a time, it looked like Senate Banking chairman Chris Dodd would take the fall, but after 24 hours of twisting in the wind, Dodd said the change that exempted past agreements to pay bonuses was made at the request of the administration.

President Obama likes to remind voters that he inherited a mess, and that's true, but this one is of his own making. And until he comes up with a satisfactory explanation of who did what when, and why, his credibility will suffer. Forty-eight hours ago, I didn't think Treasury Secretary Tim Geithner was in trouble, but if the transaction with Dodd turns out to have Geithner's fingerprints on it, his job could be in jeopardy. The deadly chain of events may have started innocently enough, with Treasury Department lawyers raising questions about the government retroactively curtailing private-sector contracts, but did Dodd, who authored the restrictive language, capitulate to some Treasury flunky, or did someone more senior lean on him?

Whomever it was, it's fair to say they did not recognize the time bomb they were setting in motion. Obama hates what he calls "process stories," but they are a staple of Washington reporting, and the backstory of this first major Obama blunder has consequences. First, it undermines the president's credibility with his own party on Capitol Hill. Democrats voted almost unanimously for the stimulus package and now Republicans have a weapon to use against them with this Treasury-inspired provision that benefits AIG. Second, the controversy undermines the trust that the American people have in government at a time when it is spending billions upon billions. Obama promises transparency, but the layers of bureaucratic double-talk look like business as usual. Geithner—formerly with the New York Federal Reserve Bank and an alumnus of Goldman Sachs, a recipient of AIG funds—is schooled in secrecy and, when he does speak, the kindest thing to say is that he's badly in need of media training.

It's not uncommon for leaders to feel that because they are giving a problem their all that others don't recognize the gains that are being made. And certainly Geithner, who is at his desk before dawn and puts in 15-hour days, is no slacker. Nor is his boss. In his new book, "Dispatches From the War Room," Democratic pollster Stan Greenberg describes what it's like to confront the big names he's worked for with bad news, and how disbelieving they were, particularly when it came to their performance on the economy. - Newsweek Story

Someone is going to take the fall for this whole mess. Obama and his team have repeatedly tried to push it off on Bush, but the American People and the Media aren't buying it. So who is it going to be?

Obama is standing steadfast by his Treasury Secretary. Dodd looked like he might be the man, but has turned the tables back onto the Obama Administration.

Obama and his team may try to just let this go away. That will be a devistating decision on there part, Republican almost unanimously voted against the stimulus and will now have a rallying cry with all of this. It has dealt a devistating blow to the Democrats who have been riding high since the election. Polling has shown a big hit and it will continue to drop as this plays out.

So, who will take the fall?