Fannie Mae CEO Herb Allison is likely to take over from Neel Kashkari, the former Goldman Sachs Group (GS) banker who brought his shiny pate to Congress to get kicked in another part of his anatomy for his handling of the Troubled Asset Relief Program (TARP). If approved, Allison's formal title will be Assistant Secretary for the Office of Financial Stability, which administers TARP. Under former Treasury Secretary Hank Paulson, TARP went from being a way to buy toxic assets to a source of capital for big banks -- whether they wanted it or not.

Now, Treasury Secretary Geithner wants to revive Paulson's original idea to the tune of a deeply flawed $1 trillion program to further enrich a handful of billionaire hedge fund and private equity honchos. And Geithner appears to have selected a very cold fish for that job -- a Yale philosophy major and Stanford MBA who lost out on the CEO's chair at Merrill Lynch a decade ago to the far more stock-broker-friendly David Komansky.

Allison went on to run the wealth-management division at Teacher's Insurance and Annuity Association - College Retirement Equity Fund (TIAA-CREF) -- boosting its total assets by 68 percent to $435 billion at the end of 2007. He got criticized there for bringing tough business discipline to a public-private institution, such as raising fees and cutting costs. From there he went to head Fannie Mae (FNM).

Allison has smarts but does he have the political skills needed to sell Congress on Geithner's toxic waste absorption plan? Can he find out how the TARP money is being spent by its recipients? Can he explain what benefits it's creating for the U.S.? Can he convince Congress to fork over even more taxpayer money -- maybe another $700 billion -- to pay for further capital injections?

I fear that he'll fumble due to his less than exemplary political skills. But we'll find out soon enough.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in Goldman Sachs securities.


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