‘It Was Nuts to Start With’

An angry Congress will not wait for an invitation to explore the resignation of the man who supervised a multibillion-dollar bailout of the nation’s troubled savings and loan industry.

Members have complained for weeks that the Bush Administration was mishandling the job of cleaning up shoddy operations of hundreds of S&Ls; and making sure that depositors got their money back. But in Washington there is always a chance that politics is at least as important in such matters as the public interest.

But the resignation of Daniel P. Kearney, who left his job as a real-estate finance expert on Wall Street to oversee the bailout, puts the matter in a different light. Kearney is not talking to reporters except in a written statement that states he had misunderstood the amount of authority he would have to do an effective job in his government post. Since it was less than he needed, he quit.

Part of the problem, obviously, is a Rube Goldberg structure that one financial consultant said “was nuts to start with.” The daily work of acquiring savings banks, disposing of their assets and paying off depositors from both asset sales and $159 billion in federal bailout funds is divided between two working agencies, with final policy questions left to a Cabinet-level Resolution Trust Corp. Oversight Board headed by Kearney.

The structure predictably led from the very first to infighting, delays and arguments over whether the Oversight Board or the Treasury Department was in charge. Congress must find out exactly what went wrong and design a structure that works.