Shelby blasts Geithner on AIG oversight

WASHINGTON, March 17 (UPI) -- U.S. Treasury Secretary Tim Geithner should have blocked AIG from paying out huge bonuses using taxpayer money, a key Senate Republican said Tuesday.

"Timothy Geithner is the secretary of the Treasury. He either knew or should have known about what was going on," Richard Shelby of Alabama, the ranking Republican member on the Senate Banking Committee, said on CBS' "The Early Show."

American Insurance Group has been roundly criticized by Republican and Democrats in Congress and the Obama administration for paying out $160 million in bonuses after receiving roughly $170 billion in taxpayer-backed money from the government since the bailout was approved last fall. President Barack Obama on Monday said Geithner would try to block the bonus distribution.

While chastising the treasury secretary, Shelby stopped short of calling for his resignation.

"I don't know if he should resign over this," he said. "(He) works for the president of the United States. But I can tell you, this is just another, you know, example of where he seems to be out of the loop."