Issa to Hold First Hearing on TARP; Geithner Invited

U.S. Representative Darrell Issa
U.S. Representative Darrell Issa, the new chairman of the House Committee on Oversight and Government Reform. Photographer: Sandy Huffaker/Bloomberg

Representative Darrell Issa, the new chairman of the House Committee on Oversight and Government Reform, will hold his first hearing on a report by the special inspector general for the Troubled Asset Relief Program.

The California Republican’s office said he has invited Treasury Secretary Timothy Geithner and inspector general Neil Barofsky to testify on Jan. 26, the same day Barofsky plans to deliver his quarterly report to Congress.

Issa’s selection of the TARP report may be part of an effort to focus on policy matters as Democrats question whether he will use his committee, with one of the largest budgets in Congress, as a partisan tool to investigate White House actions before President Barack Obama’s re-election campaign next year.

Republicans “recognize there’s an enormous risk in coming across as throwing out red meat” for their party base, said John Wonderlich, policy director at the Sunlight Foundation, a nonpartisan group in Washington that advocates government openness. “They’re too savvy to fall into a trap of doing that. They want to avoid becoming a parody.”

Danielle Brian, executive director of the Washington-based Project on Government Oversight, said a choice of TARP for the first hearing also would demonstrate the challenge of producing substantive material from the hundreds of hearings Issa says he will conduct on issues such as the auto and bank bailouts and Obama’s $814-billion economic-stimulus plan.

‘Investigations Take Time’

“Most of the TARP’s been repaid” and “it’s allowing the members the opportunity to learn from the witnesses rather than a staff-intensive investigation,” said Brian, whose independent nonprofit group investigates corruption. “They’re realizing that real investigations take time.”

Tim Massad, Treasury’s acting assistant secretary for financial stability, said he knows the program has been “unpopular” and “controversial.” At the same time, he said, people will come to understand it was effective and cost far less than expected. “I’m happy to tell that story to the oversight committee anytime they want to hear it.”

Democrats say Issa might turn a TARP investigation in a partisan direction based on the witnesses he calls, among other actions. In a letter to Issa yesterday, Representative Elijah Cummings of Maryland, the leading Democrat on the panel, said he is concerned the chairman’s recent actions risk “bringing our committee into disrepute.”

‘Reckless Assertions’

“Over the past few months, you have made a series of unfounded and reckless assertions,” Cummings wrote.

“Although you have sought to clarify some of these claims, you continue to defend others,” Cummings’s letter said. “Some of your allegations of wrongdoing resulted in the expenditure of large amounts of time and resources based on little or no evidence.”

Cummings cited Issa’s comments on a Rush Limbaugh broadcast calling the president “corrupt.” Issa said this month he was referring to trillions in bailout spending by the Obama administration.

Cummings also said Issa overstated potential savings from rooting out fraud in the Medicare health program for the elderly. And, Cummings cited Issa’s statement in April 2010 that an investigation of Goldman Sachs Group Inc. by the Securities and Exchange Commission was politically motivated. Cummings said the allegation led to an inspector general investigation that found no wrongdoing.

‘Significant Resources’

“The inspector general expended significant resources investigating your claims,” said Cummings.

Issa spokesman Frederick Hill responded by saying Cummings “pushed aside” other Democrats in line for the job of ranking member “to have the most effective obstructionist” fill the spot.

“This letter and other statements have only underscored concerns that ranking member Cummings is not interested in being a serious partner on oversight,” Hill said.

The $700-billion TARP fund was created by Congress amid the 2008 financial meltdown near the end of President George W. Bush’s administration. The U.S. Treasury in November 2008 gave Citigroup a $20 billion emergency infusion, on top of $25 billion received the prior month, from the TARP fund.

The government also backed about $300 billion of Citigroup assets, helping prop up the New York-based bank as its share price plunged below $5 and some depositors withdrew funds.

A Better Deal

The Jan. 13 report by Barofsky described efforts by bank executives to get a better deal during three days of negotiations that federal officials later dubbed “Citi Weekend.”

Issa has said he will investigate topics including a government program for helping homeowners avoid foreclosure, the release of classified diplomatic cables by WikiLeaks and Food and Drug Administration recalls.

He plans to look into the role of Fannie Mae and Freddie Mac in the home mortgage foreclosure crisis, the Financial Crisis Inquiry Commission’s failure to agree on origins of the economic meltdown and corruption in Afghanistan.

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