Republican FCIC Commissioners Shared Internal Documents with Outside Operatives
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When Darrell Issa took over the House Oversight Committee, Democrats were nervous that he would use it as a launching pad to pummel the White House with frivolous investigations. It hasn’t really worked out that way. And now, he’s covering investigations up.
Issa opened an inquiry last year into the Financial Crisis Inquiry Commission, which eventually produced a report without the backing of the Republican Commissioners on the panel. He planned a hearing today to basically criticize the findings of the majority. But he wasn’t prepared for the Democrats’ report on the minority commissioners of the FCIC, and their inappropriate behavior. What the Democrats, led by the ranking member, Rep. Elijah Cummings, found, was so damning, that Issa and his henchman Patrick McHenry cancelled the hearing.
Hilariously, the report relied on the same internal commission documents that Issa requested as part of his fishing expedition. This is from the executive summary of the report:
As part of Chairman Issa’s investigation, he requested a wide range of internal Commission documents. In response, the Committee has now obtained more than 400,000 e-mails, memoranda, draft reports, and other documents from both Democratic and Republican Commissioners and staff.
These documents indicate that Chairman Issa’s allegations are largely unsubstantiated, and this report addresses each allegation in turn. In contrast, the documents raise significant new questions about whether Republican Commissioners geared their efforts on the Commission toward helping House Republicans in their campaign to repeal the Dodd-Frank Act, rather than determining the facts that led to the economic crisis. The documents also raise a host of new ethical questions about Republican Commissioners and staff, including evidence that they leaked confidential information to outside parties on multiple occasions.
For example, on November 3, 2010, the day after the mid-term congressional elections in which Republicans took control of the House, Republican Commissioner Peter Wallison e-mailed Republican Commissioner Douglas Holtz-Eakin: “It’s very important, I think, that what we say in our separate statements not undermine the ability of the new House GOP to modify or repeal Dodd-Frank.”
That’s the least of it. The report alleges that Peter Wallison leaked information about the Commission’s work to one of his colleagues at the American Enterprise Institute, Edward Pinto, who has been a leading advocate of the discredited theory that poor people and the Community Reinvestment Act caused the financial crisis. The same kind of leaking cropped up between Bill Thomas, the ranking Republican, and a former staffer, who is now a lobbyist.
The main reason Issa and McHenry cancelled the hearing was that Cummings wanted to question Wallison and Thomas as part of the investigation. Issa both declined the request and postponed the hearing indefinitely. But it won’t end there. As Barry Ritholtz says, this is really damaging:
The Edward Pinto leak was actually referred to the FCIC’s General Counsel, who said that it was a violation of their ethics code.
Moreover, the actual charter for the FCIC was to investigate the causes of the financial crisis. If Wallison was actually using his position to try to advance the repeal of DFA, rather than simply objectively analyze the causes, I would assume he would be violating that Congressional mandate, and I would think that would at least merit a broader investigation. There are certainly ethics problems here, and maybe even criminal ones as well.
Finally, and this could be the big shocker (and perhaps why McHenry CANCELLED the “criticize the FCIC” hearing he had scheduled for today), the email traffic between Wallison and other commissioners, and Wallison’s relationship with the GOP staff, seems to suggest that Wallison may have been working with certain members of the House GOP to try to repeal DFA. That would seem to implicate certain Congressmen as well. Again, not sure if this rises to the level of criminality, but my off the cuff reaction is that an investigation is warranted here. The FCIC, which was authorized and funded by Congress, was supposed to provide an independent, bipartisan analysis of the causes of the crisis, NOT serve as a platform for a partisan, ideologically motivated attempt to repeal past legislation.
Shahien Nasiripour has more on this. Whether you think that the FCIC report was weak or not (I actually think it has some very strong points that offered a roadmap for criminal investigators to follow), the Republicans on that Commission were clearly engaged in at least unethical behavior that sought to undermine the report and financial regulation arising out of the crisis.
UPDATE: Phil Angelides, the chair of the FCIC, is out with a statement:
“The American people should be deeply disturbed by the actions of some Republican commissioners which are detailed in the report issued today by Congressman Cummings. Given the facts released today, I am not surprised that Chairman Issa and Subcommittee Chair McHenry cancelled their hearing rather than conduct a serious inquiry into what appears to be partisan and inappropriate conduct on the part of some Republican commissioners.
“The Financial Crisis Inquiry Commission (FCIC) produced a report whose facts and accuracy have gone unchallenged since its release five months ago, despite intense scrutiny from the financial industry, the media, and others. The FCIC was charged by law with conducting an impartial investigation into the financial crisis which left more than 24 million Americans out of work or unable to find full time work and which wiped away nearly $9 trillion in household wealth and retirement savings. The FCIC’s report laid bare the truth and the facts about what happened to our nation. We now know more about why the Republican commissioners did not sign on to the report and about partisan Republican efforts to protect Wall Street, undermine the report, and undercut the Dodd-Frank financial reform legislation.”