The Financial Crisis Inquiry Commission (FCIC), which was charged with investigating the causes of the 2008 financial crisis, released a report in January noting that the financial crisis “was avoidable.” The commission, however, splintered along partisan lines, with the Democratic members voting in favor of its final report and the Republican members opposing it.
The Republican FCIC members had actually gone rogue during the commission’s investigation, releasing their findings more than a month before the official FCIC report was presented to the public. Their report largely blamed the government for the crisis, and they criticized the majority for its conclusion that regulatory failure was a main cause. “The majority’s almost 550-page report is more an account of bad events than a focused explanation of what happened and why,” the Republican commissioners said.
However, a new report released today by the Democratic staff of the House Committee on Oversight and Government Reform reveals that the Republican FCIC commissioners had an ulterior motive in mind: boosting the ability of House Republicans to repeal the Dodd-Frank financial reform law. Rather than presenting an honest assessment of the crisis, e-mails released by the committee show that the Republican commissioner Peter Wallison, of the American Enterprise Institute, attempted to coordinate statements and reports in such a way that the commission wouldn’t “undermine” the GOP’s attempt to repeal or change Dodd-Frank:
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.”
The next day, he sent a similar e-mail to Vice Chairman Thomas, attaching an article entitled “GOP Pledges Major Changes to Dodd-Frank, Fannie and Freddie, CFPB.” He wrote: “Garrett [Rep. Scott Garrett] has also suggested in the past a complete repeal of Dodd-Frank. This effort should not be undermined. That law will suppress economic growth because it was based on the idea that more regulation was necessary. Boehner also said yesterday that changing this law was a priority.”
The report also found that Wallison leaked privileged information collected by the commission to his AEI colleagues:
Internal Commission documents obtained by the Committee indicate that Commissioner Wallison violated the Commission’s ethics provisions by leaking confidential information.
On August 9, 2010, Commission staff prepared a memo to Commissioners entitled “Analysis of Housing Data and Comparison with Ed Pinto’s Analysis.” This memo compared information provided by Mr. Pinto to the Commission on March 16, 2010, against confidential data provided by the Federal Reserve and not otherwise available to the public or AEI.
The report makes it quite clear that the Republican commissioners, and Wallison in particular, had no interest in actually explaining the causes of the financial crisis that decimated families across the country, but were focused on supporting a partisan political and legislative agenda. FCIC Chairman Phil Angelides (D) was scheduled to testify before the oversight committee today regarding the commission’s findings, but Chairman Darrell Issa (R-CA) canceled the hearing.