This week the Democratic Staff of the House Committee on Oversight and Government Reform issued a 37 page review, An Examination of Attacks Against the Financial Crisis Inquiry Commission.
On July 27, 2010, then-Ranking Member [Darrell] Issa [R-CA] announced an investigation into the activities of the Commission. In a letter to Chairman Angelides, Ranking Member Issa wrote that, although he had hoped that the Commission would “be able to conduct a fair and effective investigation which would help Congress as it considered financial regulatory reform legislation,” he was launching his investigation in part because “the Administration and congressional Democrats have instead chosen to ram through a partisan financial regulation bill before the FCIC has completed its work.”
"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."
It's a pretty damning review, particularly of commission member Peter Wallison. In the 70s and 80s he was on various Republican staffs including a stint as White House Counsel to President Reagan. He's been at the American Enterprise Institute since 1999.
The report says he sent to other Republican members of the committee various messages saying “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.”
The report also says "Internal Commission documents indicate that Commissioner Wallison used his position to promote a theory of the economic crisis supported by Chairman Issa and put forth by Edward Pinto, a Resident Fellow at the American Enterprise Institute (AEI). This theory, that government housing policy was the primary cause of the nation’s economic crisis, was ultimately rejected as flawed by every other member of the Commission."
"Internal Commission documents indicate that Commissioner Wallison violated the Commission’s ethics provisions by leaking confidential information to Mr. Pinto on several occasions." Mr. Pinto is Edward Pinto, Resident Fellow of AEI and an executive at Fannie in the 80s.
These are the people behind the lie that Fannie and Freddie caused the financial crisis. For details of the lies see this post by David Min. In addition to ignoring facts like there were busts in commercial real estate and in other countries (neither markets affected by Fannie or Freddie) they also just recategorized mortgages in a way no one else uses so the numbers fit their outcome.
While these lies have become pretty mainstream in Republican circles, on the committee Wallison was an extremist. The three other Republican commissioners didn't agree with him. The initial report was spintered. The Democrats released their report, the three Republicans released their dissent and Wallison released his own.
"Despite repeated claims by Commissioner Wallison that the Commission failed to consider AEI’s position that the economic crisis was caused by government housing policies, internal Commission documents demonstrate that Commission staff went above and beyond in fully considering the AEI position, and that all of the other Commissioners—including the three other Republicans—rejected this position as fundamentally flawed."
Mike Konczal of the Roosevelt Institute wrote, "What interests me the most are how the other members of the GOP reacted to Wallison and Pinto’s thesis that the GSEs caused the financial crisis." The review includes messages between republican commissioner staffers wondering how to deal with an "intractable Peter" and "is peter thinking idependently [sic] or is he just a parrot for pinto?" and "I think wmt [Vice Chairman William M. Thomas] is going to push to find out if pinto is being paid by anyone."
As Krugman sums this all up, "But while the non-Wallison GOP commissioners basically agreed that the whole thing was bogus, they avoided saying so clearly. And that was clearly political. So on the question of [whether these people are] stupid versus evil, we have a winner."
The review doesn't just damn Wallison, it also raises some questions about the Republican Vice Chairman. "Internal Commission documents raise questions about the extent to which Vice Chairman Thomas and his Commission staff were providing information to, and receiving information from, a CEO of a political consulting firm who is also employed by the Vice Chairman’s law firm."
That would be Alex Brill, CEO of Matrix Global Advisors, and "an Economic Policy Advisor at the law firm of Buchanan, Ingersoll, and Rooney in Washington, DC, where Vice Chairman Thomas is a Senior Advisor". "Mr. Brill is also a Research Fellow at AEI." Thomas sent Brill copies of internal non-public draft memos, conversations, witnesses lists, media advisories, and named investigation targets.
Doesn't that sound bad?
"As the culmination of a year-long investigation, Chairmen Issa and McHenry scheduled a hearing on these matters for July 13, 2011. Despite previous reports, Chairman Issa did not invite Vice Chairman Thomas to testify. For this reason, on July 1, 2011, Ranking Members Cummings and Quigley requested that Committee staff conduct a bipartisan staff interview of Vice Chairman Thomas, as they had done with Chairman Angelides. Chairman Issa declined to grant this request. Instead, he notified the Committee that the hearing had been postponed indefinitely."
Fuck you Darrel Issa.
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