Republicans Send Letter to SEC Questioning Timing of Goldman Sachs Lawsuit

Rep. Darrell Issa, R-Calif. (AP).

Republicans sent a letter to the Securities and Exchange Commission Tuesday suggesting the agency's civil lawsuit against financial giant Goldman Sachs has created "serious questions" about the SEC's "independence and impartiality."

In a letter penned to the SEC on Tuesday, Rep. Darrell Issa, R-Calif., and eight others wondered whether politics have "unduly influenced" the decision to file the complaint, which comes as Senate Democrats push this week for a vote on a major overhaul of financial regulations.

"The events of the past five days have fueled legitimate suspicion on the part of the American people that the commission has attempted to assist the White House, the Democratic Party and congressional Democrats by timing the suit to coincide with the Senate's consideration of financial regulatory legislation, or by providing Democrats with advance notice," Issa wrote in his letter to SEC Chairwoman Mary Schapiro

"In fact, the aggressive campaign by Democrats in support of the legislation neatly coincided with the commission's announcement of the suit," he wrote.

The commission's lawsuit, which was filed on Friday, alleges that Goldman Sachs withheld information in a complex transaction involving risky mortgage securities and misled investors. Democrats have since used the charges as fodder in pressing for a sweeping overhaul bill under consideration.

Issa and others so far are not refuting the merit of the suit, but they do question its timing.

In an interview with Fox News, Sen. Orrin Hatch, R-Utah, who sits on the Senate Finance Committee, called the circumstances surrounding the lawsuit "very suspect."

"This whole Goldman Sachs thing, isn't that a little odd that all of a sudden right at the height of this legislative period we suddenly have the SEC filing suit against Goldman Sachs?" he asked. "There's something terribly wrong here, and I don't know what it is, but to do that right at this particular time, the timing is very suspect in my eyes."

Issa suggests in the letter that the SEC, an independent agency responsible for regulating the securities industry, may have intentionally filed its suit to coincide with the Democrats' legislative agenda.

Issa went on to demand that the commission disclose whether any of its officers or employees tried to "use their positions to help President Obama and congressional Democrats."

The White House has refuted any claims that the Obama administration lobbied the SEC to file charges against Goldman Sachs.

In a news conference with reporters on Monday, White House Press Secretary Robert Gibbs said the SEC is "by law an independent agency" and "does not coordinate with the White House."

"We received no advance notice of any enforcement action," Gibbs said.

Click here to read the letter from House Republicans.