House’s Issa Asks Crisis Panel to Explain Spending

U.S. Representative Darrell Issa is asking the Financial Crisis Inquiry Commission to explain its spending after the panel probing the 2008 credit market collapse requested that Congress supplement its $8 million budget.

Issa, a California Republican, sent a letter to FCIC Chairman Phil Angelides today, seeking a list of contracts with media consultants and the amount of money spent on such services. Issa also asked Angelides, a Democrat who formerly served as California’s treasurer, to provide a full accounting of travel expenses by FCIC commissioners and their staffs, including payments for airfare, lodging and meals.

“I am concerned that the FCIC’s own problems with financial mismanagement and partisanship may have resulted in a waste of taxpayer funds that does not warrant an additional appropriation,” wrote Issa, the top Republican on the House Oversight and Government Reform Committee.

The FCIC asked for additional funding after determining that its $8 million budget wouldn’t cover everything it wanted to do, including electronically publishing documents obtains from banks, panel spokesman Tucker Warren said in a July 1 interview. The House today approved a $1.8 million increase for the FCIC as part of a $60 billion spending bill meant to finance the war in Afghanistan.

Issa asked Angelides to respond to his request by Aug. 10. The FCIC will review Issa’s letter, Warren said today in a telephone interview.

On Loan

The FCIC and its 43 full-time employees were paid a total of $1.4 million as of March 31, according to the commission’s website. Some employees, on loan from government agencies such as the Federal Reserve and Securities and Exchange Commission, aren’t being paid by the panel.

Issa also asked what steps the FCIC has taken to limit conflicts of interest involving commissioners, staff and their current employers.

FCIC Commissioner Byron Georgiou and staff investigator Christopher Seefer have ties to Robbins Geller Rudman & Dowd LLP, a San Diego-based law firm that represents investors in suits filed against Goldman Sachs Group Inc. and Citigroup Inc.

Georgiou is listed as of counsel on the law firm’s website. Seefer is on leave from the firm. Goldman Sachs and Citigroup, New York-based banks that got U.S. bailout funds to help weather the credit crisis, have both been the focus of FCIC hearings.

FCIC Executive Director Wendy Edelberg is on loan from the Fed, which was faulted by lawmakers for doing too little to prevent risky lending before the U.S. mortgage market collapsed and for a lack of transparency in bank bailouts after the economy faltered in 2008.

Issa, in his letter to Angelides, said it was “troubling” that Edelberg works for the Fed, considering the central bank’s “controversial actions during the financial crisis.”

Congress approved legislation creating the 10-member FCIC in May 2009. The panel, which must report its findings by December, is investigating the role banks and regulators played in an economic collapse that led to more than $1.78 trillion of writedowns and credit losses at financial companies worldwide.

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