Democrats allege GOP partisanship on financial crisis panel
A Republican member of the bipartisan commission that investigated the causes of the nation’s financial crisis tried to use the panel’s findings to derail the sweeping overhaul of financial industry regulations, according to internal emails released by Democrats.
Democrats on the House Oversight Committee said a review of more than 400,000 documents showed that Peter Wallison urged his GOP colleagues on the Financial Crisis Inquiry Commission “to use their positions on the commission to help House Republicans in their efforts to repeal the Dodd-Frank Act.”
“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,” Wallison wrote in an email to Republican Commissioner Douglas Holtz-Eakin in November.
The email was sent the day after Republicans won control of the House in midterm elections, the Democrats noted in a 37-page report released Wednesday. Wallison, a fellow at the conservative American Enterprise Institute think tank, also sent a similar email to Republican Commissioner Bill Thomas, the report said.
The report said Wallison wanted to blame the crisis on government housing policy, but that the other Republican commissioners rejected it. The Democrats also accused Wallison and Thomas of violating ethics guidelines in sharing confidential information about the commission’s work with outsiders, the report said.
Wallison denied that he coordinated his efforts with House Republicans.
He said he shared their opposition to the financial reform law and was concerned that if Republican commissioners didn’t put up a united front, “we were simply going to weaken the position of Republicans in the House or the Senate who wanted to repeal the Dodd-Frank Act.”
Wallison said Democrats on the commission weren’t interested in finding out key facts about the role of government housing policy in creating the subprime housing boom.
“The whole thing was very badly run and never objective from the beginning,” he said.
Thomas did not respond to email and phone requests for comment.
The allegations are another blow to the much-maligned commission, a bipartisan panel headed by former California Treasurer Phil Angelides, a Democrat. Established by Congress to produce a definitive report on the causes of the 2008 financial crisis, the panel spent 18 months investigating, but split into partisan camps and produced a fractured report in January.
The main conclusions — approved only by the six Democrats — spread blame for the crisis widely among consumers, regulators and financial executives. Wallison wrote a dissent blaming government housing policy, including the efforts of Fannie Mae and Freddie Mac to expand home ownership.
The other three Republicans wrote a dissent blaming an unavoidable sequence of global economic forces.
Angelides said he was “disturbed and the American people should be disturbed” by the actions of some Republican commissioners contained in Wednesday’s report. The findings help explain why the commission split into partisan factions, he said.
House Republicans have charged Democrats on the commission with partisanship. House Oversight Committee Chairman Darrell Issa (R-Vista) launched an investigation and requested emails, memos and other documents.
The committee scheduled a hearing for Wednesday, with Angelides set to testify. Rep. Elijah E. Cummings (D-Md.) said he requested bipartisan interviews with Wallison and Thomas ahead of the hearing, but Issa refused. The hearing was canceled Monday.
Issa spokesman Jeffrey Solsby said only that the hearing was postponed “to allow further review and analysis.”
Committee Democrats said their investigation found that Issa’s allegations of partisanship, conflicts of interest and financial mismanagement by the commission’s Democrats “were largely unsubstantiated.”
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