Issa Says Oversight and Government Reform Committee Attempt to Link CEO Compensation to Subprime Crisis 'Scapegoating'

Press Release

One day before Oversight and Government Reform Committee Chairman Henry Waxman is scheduled to convene a full committee hearing pairing longstanding Democrat angst over compensation for business executives with the subprime mortgage crisis, Rep. Darrell Issa (R-CA) said the committee was, yet again, failing to focus on its primary responsibility of investigating waste, fraud, and abuse in the federal government.

"This hearing is a misguided attempt by Chairman Waxman to scapegoat a few wealthy individuals in a complex crisis where there's plenty of blame to go around," said Issa. "It is always easy to blame people with a lot of money."

"The Federal Government played a role in pushing lenders to make risky loans but instead of investigating misguided policies, Chairman Waxman is going to grind an old axe on an issue organized labor has pushed for years," Issa predicted. "Mortgage lenders and others have lost billions of dollars and have every incentive to correct any and all mistakes that led to these losses. The Federal Government, however, has less of an incentive to correct misguided policies when the attention of the Chairman of the Committee on Oversight and Government Reform is wandering elsewhere."

Issa cited three examples of government action that the Committee was neglecting to investigate:

The Community Reinvestment Act of 1977 mandated that lender provide credit, including home ownership opportunities, to underserved populations.
The Federal Reserve Bank of New York, in 2000, endorsed the securitization of subprime mortgages.
Alan Greenspan, in 2004, strongly endorsed Adjustable Rate Mortgages as a way of making home ownership more broadly available.

"This hearing is election-year politics," said Issa. "It will not examine the substantive factors that contributed to the subprime mortgage crisis."

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