Financial crisis commissioner defends against Democratic charges

By Peter Schroeder - 07/15/11 11:10 AM ET

A Republican commissioner of the Financial Crisis Inquiry Commission (FCIC) has defended his actions on the panel from Democratic attacks, and launched a counter-charge that it was Democratic members that used the panel to push a political agenda.

Peter Wallison, a fellow of financial policy studies at the American Enterprise Institute, took to the organization's website to rebut a recent report from Democrats on the House Oversight Committee. The report came out after the Republican majority on the committee postponed a hearing on the FCIC that was supposed to be held Wednesday.

The congressionally-mandated panel, created to get to the bottom of the financial crisis, fractured down partisan lines before issuing a final report. As a result, the six Democratic members of the panel approved the "official" FCIC report, while the four Republican commissioners split and issued two dissents. Wallison issued his own, which laid the blame for the crisis on government housing policy.

The report singled out Wallison, highlighting an email he sent to fellow GOP Commissioner Douglas Holtz-Eakin on Nov. 3 — the day after Republicans regained the majority in the House. In the email, Wallison states that it is "very important" that the separate GOP statements "not undermine the ability of the new House GOP to modify or repeal Dodd-Frank."

But Wallison said that comment was focused on the fact that if the GOP members issued two separate dissents, it would "weaken the position of the House and Senate Republicans on Dodd-Frank repeal." He said he was not trying to persuade those commissioners to dissent from the report, but that they had already decided to do so and he was pursuing a united front.

He also argues that it was Democrats on the panel that were the ones pursuing a political goal. He asserts that Phil Angelides, the Democratic chairman of the FCIC, led the hearings the commission would hold before conducting any investigation, focusing on the private sector and paying "scant attention to the government's role."

He also claimed that the FCIC engaged in a "concerted effort" to suppress information showing the government pushed to reduce mortgage underwriting standards — something Wallison highlighted as a main culprit of the financial crisis in his dissent.