Tech blogger Michael Arrington might be in limbo, but someone else has lost more in the CrunchFund debacle.

It’s now been five full days since CrunchFund was unveiled, and no one is coming out of this mess looking worse than Arianna Huffington.

Various reports suggest that she’s furious with the implicit breaching of AOL’s editorial ethics, and wants Michael Arrington not just banished from AOL editorial, but from AOL (AOL) as a whole. Sounds as if she was blind-sided, except that a source close to the situation insists that she knew about CrunchFund for weeks (but possibly didn’t realize its negative PR implications).

Huffington’s problem, of course, is that it no longer matters which version of the above story is correct. If Huffington knew about CrunchFund and is now hanging Arrington out to dry, then she will deservedly lose the respect of her remaining employees. If she didn’t know, then one has to wonder how much attention she’s paying to her charges. After all, CrunchFund was secret but not that secret.

Kind of reminds me of what happened years ago to Bill Weld, the former Massachusetts governor who wanted the same job in New York. After leaving public office, Weld joined an education-focused private equity firm, and spent some time as interim CEO of a portfolio company in Kentucky. That company, a for-profit college, got accused of defrauding the government, and Weld claimed ignorance. Didn’t matter. Either he was involved and a crook, or not involved and an absentee landlord. Neither would make for a compelling campaign commercial.

To me, Huffington is now in the same boat.

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