WASHINGTON – Republicans were poised Wednesday to bash a Democratic-run commission that investigated the financial meltdown, when Democrats counterpunched with a report that sharply criticized two GOP commission members. Then the hearing was postponed — indefinitely.
A Republican spokesman for the House Oversight and Government Reform Committee wouldn't acknowledge the two developments were connected. "The hearing was postponed to allow for additional review and analysis of material," said spokesman Jeffrey Solsby.
Committee Chairman Darrell Issa, R-Calif., scheduled the hearing to focus on the Financial Crisis Inquiry Commission's "inability to reach consensus, its waste of taxpayer funds, and its failure to contribute in a meaningful way" to the debate over financial regulation.
The report issued by top committee Democrat Elijah Cummings said the two Republicans, Peter Wallison and Bill Thomas, leaked sensitive information to people outside the commission. It also said Wallison was primarily interested in undermining the Dodd-Frank law, which overhauled regulation of the financial industry with the most changes since the Great Depression.
Wallison and Thomas were not immediately available for comment. Wallision was White House counsel and a Treasury Department official under President Ronald Reagan. Thomas formerly was chairman of the House Ways and Means Committee.
The commission majority reported last January that the economic disaster was avoidable, and was caused by corporate mismanagement, risk-taking on Wall Street and government regulatory failures. However, only the six Democrats on the 10-member panel approved the findings. Wallison said the housing crisis was the main cause of the meltdown.
"Internal commission documents indicate that commissioner Wallison violated the commission's ethics provisions by leaking confidential information" on several occasions to a scholar at the conservative American Enterprise Institute, the Democratic report said.
It added that In response to one of these violations, the commission general counsel said the leak violated the panel's ethics guidelines and also a confidentiality agreement with the Federal Reserve.
The report said one example of Wallison's focus on the Dodd-Frank law came on Nov. 3, 2010, the day after Republicans regained control of the House. He emailed another Republican commissioner, "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."
In his dissenting views in January, Wallision wrote, "The Dodd-Frank Act was legislative overreach and unnecessary." He added: "The appropriate policy choice was to reduce or eliminate the government's involvement in the residential mortgage markets, not to impose significant new regulation on the financial system."
In Thomas' case, the Democrats said, "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."
The information included copies of internal drafts of commission memos, information about conversations among commissioners and staff regarding potential witnesses, and information about how the staff would treat specific corporations under investigation, such as Citigroup.
Phil Angelides, the Democrat who headed the commission, said: "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 the hearing was canceled.
House Republicans voted almost unanimously against the Dodd-Frank Act. Rep. John Boehner, now the House speaker, said when the bill passed last year: "I think it ought to be repealed."