Last week a handful of Republican lawmakers sent a letter to the U.S. attorney general asking him to appoint a special counsel to investigate Fannie Mae and Freddie Mac's role in triggering the current financial crisis.
From the letter:
At the center of the troubles in the mortgage-related markets may lie a cluster of maladies that never should have taken hold—fraud and mismanagement at Fannie Mae and Freddie Mac, missed opportunities to rein in these Government Sponsored Enterprises, and overzealous lending under the auspices of the Community Reinvestment Act (CRA).
Read the full letter here.
GOP members have been calling the mortgage finance giants patient zero of the crisis, as lawmakers on Capitol Hill look to score points before the election. For their part, Democrats are fingering deregulation and lax oversight—particularly on the part of the Federal Reserve—as the root cause of the turmoil.
I recently caught up with Rep. John Mica (R-Fla.), one of the lawmakers who made the request, to chat about the issue:
Why should a special prosecutor be appointed to investigate Fannie and Freddie?
"There are several FBI investigations ongoing that we know about, but this transcends traditional territory and they are a little bit squeamish to get into the government side of it. One of the reasons I called for the special prosecutor—or independent counsel—is that there are some political figures involved and they need to be held accountable. [A special prosecutor] can do agency, they can do private sector, and then they can come after people on the Hill. But right now on the Hill, it's very sensitive—it's a buddy-buddy thing—and a lot of them had culpability."
Which lawmakers are you referring to?
"The Wall Street Journal...showed that the biggest recipient of 20 years of political contributions was not Chris Dodd—he was actually in second place—it was actually Barack Obama, who in less than four years got the most money from Fannie Mae and Freddie Mac."