110 HRES 1452 IH: Establishing the Select Committee on
U.S. House of Representatives
2008-09-17
text/xml
EN
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Whereas for the first time since the Great Depression, the
Board of Governors of the Federal Reserve System voted to open the Discount
Window to investment banks;
Whereas the Board of Governors of the Federal Reserve
System guaranteed $29,000,000,000 of security liabilities of investment bank
Bear Stearns;
Whereas on July 30, 2008, the Housing and Economic
Recovery Act of 2008 was signed into law and gave the Federal Government the
authority to take over the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation;
Whereas Treasury Secretary Henry Paulson testified before
the Senate Banking Committee: If you’ve got a squirt gun in your pocket,
you may have to take it out. If you’ve got a bazooka, and people know you’ve
got it, you may not have to take it out.
;
Whereas on September 6, 2008, Secretary Paulson announced
that the Secretary would use the new powers under the Housing and Economic
Recovery Act of 2008 to purchase up to $100,000,000,000 of preferred stock in
each Government-sponsored enterprise as needed to ensure that each
Government-sponsored enterprise maintains a positive net worth;
Whereas on September 7, 2008, Federal Housing Finance
Agency Director, James Lockhart, established a conservatorship for the Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation
putting the Government in control of the companies;
Whereas on September 18, 2008, the Washington Post
reported Fannie Mae, and to a lesser extent Freddie Mac, became enmeshed
in the fabric of political Washington. They were places former government
officials went to get wealthy—and to wait for new federal appointments. At
Fannie Mae, chief executives had clauses written into their contracts spelling
out the severance benefits they would receive if they left for a government
post. The companies also donated generously to the campaigns of favored
politicians. The companies' political action committees and employees have
donated $4.8 million to members of Congress since 1989, according to the Center
for Responsive Politics.
;
Whereas the Board of Governors of the Federal Reserve
System announced on Sunday, September 14, 2008, that it expanded the criteria
of eligible collateral to be pledged at the Primary Dealer Credit Facility to
securities below investment grade;
Whereas on September 17, 2008, Bloomberg News reported
that Allianz SE, Europe’s largest insurer, made an offer to invest in American
International Group Inc. that was rejected by the United States insurer 2 days
before it accepted a Government takeover;
Whereas on September 16, 2008, the Board of Governors of
the Federal Reserve System authorized the Federal Reserve Bank of New York to
lend up to $85,000,000,000 to the American International Group (AIG);
and
Whereas on September 17, 2008, the Secretary of the
Treasury announced the Treasury was going to lend money to the Board of
Governors of the Federal Reserve System to help it meet its obligations: Now,
therefore, be it
1.Select committee on financial
bailouts
(a)There is hereby
established the Select Committee on Financial Bailouts (hereinafter in this
resolution referred to as the select committee
) to investigate
the extraordinary actions taken by the Board of Governors of the Federal
Reserve System and the Secretary of the Treasury in 2008.
(b)The
select committee shall be comprised of 10 members appointed by the Speaker, of
whom 5 shall be appointed on the recommendation of the minority leader, as
follows: one member of the majority party and one member of the minority party
from the Committees on Financial Services, Ways and Means, Energy and Commerce,
and Oversight and Government Reform, and one member of each party from the
leadership of the House of Representatives.
(c)The
select committee shall—
(1)investigate the
actions taken by the Board of Governors of the Federal Reserve System with the
support of the Secretary of the Treasury related to the March 16, 2008, sale of
The Bear Stearns Companies Inc., to JPMorgan Chase & Company;
(2)investigate the actions taken by the
Secretary of the Treasury, with support from the Board of Governors of the
Federal Reserve System on September 7, 2008, to place the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation, both
Government-sponsored enterprises, into conservatorship;
(3)investigate the
actions taken by the Secretary of the Treasury and the Board of Governors of
the Federal Reserve System related to the purchase of Merrill Lynch & Co.,
Inc. by the Bank of America Corporation on September 15, 2008;
(4)investigate the actions taken by the
Secretary of the Treasury and the Board of Governors of the Federal Reserve
System related to the bankruptcy filing by Lehman Brothers Holdings Inc. on
September 15, 2008;
(5)investigate the
actions taken by the Board of Governors of the Federal Reserve System, with the
support of the Secretary of the Treasury, related to the authorization of an
emergency loan to the American International Group on September 16,
2008;
(6)investigate the oversight role of the Board
of Directors of the Federal National Mortgage Association and of the Federal
Home Loan Mortgage Corporation and their efforts to protect the interests of
taxpayers and the appropriateness of their compensation; and
(7)investigate the
role that political influence may have had on the oversight of the financial
markets by both the Congress and the Federal regulatory agencies.
(d)Clauses
1, 2 (including paragraph (m) granting subpoena authority), 4, and 5 of rule XI
of the Rules of the House of Representatives shall apply to the select
committee.
2.The select committee shall submit to the
House, no later than December 31, 2008, a report—
(1)detailing the
extraordinary actions taken by the Secretary of the Treasury and the Board of
Governors of the Federal Reserve System in 2008;
(2)outlining the role that political
activities and influence had in affecting the market conditions that led to the
extraordinary actions taken by the Secretary of the Treasury and the Board of
Governors of the Federal Reserve System; and
(3)recommending congressional action that
would prevent the need for the Secretary of the Treasury and the Board of
Governors of the Federal Reserve System to intervene in the capital markets in
the future.