I.G. PROBE: QUESTIONS ONBAILOUT WATCHDOG; UPDATE: HENSARLING ASKSFOR COMMITTEE PROBE

UPDATE 5 P.M.:
A.I.G. INQUIRY TRIGGERED DISPUTE
ABC NEWS: The Treasury Department's ongoing dispute with bailout watchdog Neil Barofsky stems from the Obama administration’s refusal in April to hand over documents relating to AIG's executive compensation structure . . . "I strongly encourage the panel to promptly investigate these troubling reports," said Rep. Jeb Hensarling (R-TX) . . . READ MORE

ABC'S TAPPER GRILLS W.H. SPOKESMAN

GRASSLEY SEEKS GEITHNER ANSWER
WASHINGTON POST: Neil M. Barofsky, the special inspector general charged with overseeing the $700 billion bailout of the financial sector says he has been told by the Treasury Department that the agency has legal authority over his office, a claim that could threaten its independence. Sen. Charles E. Grassley of Iowa sent a letter to Treasury Secretary Timothy F. Geithner this week expressing concern about "potentially serious questions this issue raises about Treasury's respect for the [special inspector general's] independence and authority to access documents." . . . READ MORE

TREASURY: A.I.G. 'COINCIDENCE'
LOS ANGELES TIMES: A Treasury Department challenge to the authority of government bailout watchdog Neil M. Barofsky came just as he had begun a sensitive investigation of the department's role in approving bonuses to executives of insurance giant AIG . . . Asked why Barofsky's legal authority was challenged by the department just as the AIG inquiry began, Treasury Department spokesman Andrew Williams said: "It is entirely a coincidence." . . . READ MORE

'WHAT DOMINOES FALL NEXT'
ROBERT STACY McCAIN/PJM: Describing the probe into the dismissal of the AmeriCorps inspector general Gerald Walpin, one Capitol Hill source on Thursday compared Iowa Sen. Chuck Grassley’s demand for facts in the case to a row of dominoes ready to tip over. Grassley is asking questions, a team of Senate investigators is poring over documents in the case, and where the investigation proceeds now “depends on what dominoes fall next,” explained the source, who spoke on condition of anonymity. . . . READ MORE

COMMENTARY:
BILL WILSON/WASHINGTON TIMES: Thinking he could do as he pleased, Mr. Obama's initial justification for this cool display of corruption was that he had "lost confidence" in Mr. Walpin. When Republicans and Democrats in Congress refused to be mollified by this explanation, the White House shifted into "plumbers" mode . . . READ MORE

RUSH LIMBAUGH: A great example of what can happen when you fight back. The White House is reeling on this. They attempted to impugn the character and reputation of a fine man and he chose not to sit there and take it. And finally he's getting some backing from Republicans now who are getting courageous fighting this back. . . . READ MORE

BYRON YORK/WASHINGTON EXAMINER: What's next in the budding scandal over President Obama's abrupt firing of Gerald Walpin, the inspector general of AmeriCorps? . . . Republicans are brainstorming things they can do by themselves to shake loose information from an administration that has no obligation to cooperate with them. And indeed, there are a few ways. . . . READ MORE

BLOG REACTION: DAN RIEHL, NO SHEEPLES HERE, INSTAPUNDIT, GATEWAY PUNDIT, AMERICAN SPECTATOR, CREATIVE MINORITY REPORT, DAN COLLINS, PUNDIT & PUNDETTE, RHETORICAN, NICE DEB, MEMEORANDUM

PREVIOUSLY:

• I.G. PROBE WIDENS
• BLOWING THE WHISTLE
• AMERICORPS WHISTLEBLOWER SPEAKS

WALL STREET P.M. 06.19.09: DOW STAYS STAGNANT

DJIA: -20.25 CLOSE 8,535.35
S&P 500: +2.86 CLOSE 921.23

NTC NEWS INSTANT SUMMARY: Morning gains faded Friday afternoon, as the Dow Jones Industrial Average failed to recover momentum. The Dow ending the week more than 250 points below the June 12 peak of nearly 8,800 that marked the peak of the three-month rally that began in March. The S&P 500 score a minor gain Friday, but closed about 25 points below its June 12 level.