Alex Constantine - April 18, 2009
By DEBORAH SOLOMON
APRIL 14, 2009
WASHINGTON -- President Barack Obama is expected to tap Fannie Mae Chief Executive Herb Allison to head the government's $700 billion financial-rescue program, people familiar with the matter say.
In choosing Mr. Allison to head the Troubled Asset Relief Program, the administration is turning to an experienced manager at a time when it is having trouble filling key finance posts. Mr. Allison, 65 years old, is the former chairman of investment company TIAA-CREF and was a Merrill Lynch & Co. executive for years. In September, he agreed to run Fannie Mae after the U.S. took over the mortgage giant and its sister firm, Freddie Mac.
Mr. Obama could announce his intention to nominate Mr. Allison as assistant secretary for the Office of Financial Stability as early as this week. Mr. Allison would replace Neel Kashkari, a holdover from the Bush administration, who was asked by Treasury Secretary Timothy Geithner to stay on until a replacement was found.
The selection will leave the administration searching for permanent leaders of both Fannie and Freddie. David Moffett, Freddie's CEO, announced his resignation last month.
The Obama administration has had difficulty finding executives willing to serve as directors and executives of companies in the government's embrace, in part because of intense scrutiny of companies receiving government aid.
Mr. Geithner has been searching for months for someone to run TARP. Various candidates either have not made it through the vetting process or have pulled out of consideration. Last month, the leading candidate, hedge-fund manager Frank Brosens, withdrew for personal reasons.
Mr. Allison has been on the short list from the beginning. His selection was complicated by several factors, including the need to replace him at Fannie, people familiar with the matter say. He spent most of his career at Merrill Lynch, eventually serving as president and COO. He became chairman of TIAA-CREF in 2002. As Fannie's CEO, he opted to take no salary or bonus.
If confirmed, Mr. Allison will become point person for what has become an unpopular program. He'll have to defend plans for spending the program's remaining cash, and would likely represent the administration if it requests more bailout funds, which many observers expect.