Washington, DC - Today, House Financial Services Committee Chairman Barney Frank (D-MA) sent the following response to Ranking Member Spencer Bachus (R-AL) on the issue of AIG hearings:

“I continue to believe that the Financial Services Committee should give priority to pending public policy questions, and throughout last year the committee was busy on legislation responding to the financial crisis, which every Republican in the House voted against.  In addition, I had not thought it useful to spend a lot of time investigating the past actions taken by the Bush administration – such as its intervention in AIG. It is of course the case that the decision to provide funding to AIG and all the specific issues that Rep. Bachus has raised came during the Bush administration. And given that Secretary Geithner was recused, it’s unfortunate that Rep. Bachus continues to make points about Secretary Geithner in his letters and not the two men that outranked him, Secretary Paulson and Chairman Bernanke.  I also will point out that the committee did hold two hearings at the Republicans’ request on the FHA and covered bonds. We now have the time to put this back on the agenda. It is one of the subjects that the committee will be looking at.”

Chairman Frank also released today the following letter he intended to send to Ranking Member Bachus last summer. In July, Rep. Bachus orally requested Rep. Frank not send this letter and in return Rep. Bachus withdrew his request for a hearing at that point.  However, because Rep. Bachus continues to reference his withdrawn July 16 letter in his latest press releases, Rep. Frank believes his letter should now be in the public domain.

July 17, 2009

Representative Spencer Bachus
U.S. House of Representatives
Ranking Member, Committee on Financial Services
2246 Rayburn House Office Building
Washington, D.C. 20515-0001

Dear Representative Bachus,

I am perplexed by your letter of July 16th asking for a hearing on possible disparate treatment between foreign and domestic creditors of AIG.  The reason is that your position on this matter has been one of several reversals of position, and I am also struck by the fact that this letter to me expresses a view very different than the view you expressed in our last conversation on the matter.  I would say as a procedural matter that a pattern in which you send me letters and then subsequently orally tell me to disregard them, and then send a similar letter much later, makes it very difficult to coordinate activities.

I do not remember the date of your first letter on this subject but I can clearly remember that when I discussed it with you, you said that you did not think a hearing was necessary and that you would pursue it in other ways.  You did ask several questions of administration officials on the subject, as I recall.  As I said, our last conversation on the matter was one in which you said you thought this would be a sufficient way to pursue it.  Then, after several weeks at least, two weeks before we are to break for the summer, with a hearing schedule very full on matters that Members of both parties have asked be aired, particularly the proposals for substantial financial reform, you write and ask me to schedule a hearing.  If this remains your opinion, and I must tell you that past experience does not convince me that that will be the case, we will be able to have a hearing on it in September.  But there are literally no times available between today – I am composing this letter at 8:40 on Friday morning, less than an hour before we will convene to vote on a resolution offered by the Republican leader and then go into an important hearing – and the time of the recess two weeks from now.  There will of course also be important matters considered on the floor between now and then, possibly including the health bill, and certainly including the rest of the appropriations.  The need for Members to be on the floor for a series of votes – generally initiated by the Republican side, also of course cuts into the time we have available for committee business, because floor time takes priority. 

You say that “this hearing be scheduled as soon as possible.”  Had you held to your original position, we would have had the hearing much earlier this year, but the on again – off again nature of your request, culminating in this request which I receive with literally two weeks to go in the session and a heavy schedule of hearings, frankly does not seem to me to be a serious effort to get a hearing, as much as it is an effort to make some political point.  Making such points is entirely legitimate because we are after all elected officials participating in the political process.  But I did want to make it clear that the fact that we will not be able to have a hearing on this until September – again assuming you still want one then – is simply a reflection of the inconsistent way in which you have approached this issue and the fact that the committee agenda, as you in fact acknowledge in this most recent letter, is filled with matters directly relevant to our single most important current legislative responsibility – dealing with efforts to prevent a recurrence of the current financial crisis.

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