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Press Office - Press Releases
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DOLE: STOP DELAYING SENATE HEARINGS ON WALL STREET TURMOIL
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September 18th, 2008 - Washington, D.C. - Today U.S. Sen. Elizabeth Dole wrote to Senate Banking Committee Chairman Chris Dodd and Ranking Member Richard Shelby and made the following statement regarding the Banking Committee’s failure to hold timely hearings on recent federal actions related to the ongoing turmoil on Wall Street.
“In the past two weeks, the Federal Reserve and the Treasury Department have spent at least 300 billion taxpayer dollars to bail out or loan money to private enterprises, and the American people deserve to know that their hard earned money is being spent wisely, effectively and only out of absolute necessity,” said Dole.
“While I understand that all parties involved in these discussions, especially the Treasury Secretary and the Federal Reserve Chairman, have been heavily engaged with the business of their respective institutions, they are employed by the taxpayers and obliged to answer to them. It is also critically important for the Congress to hold substantive hearings to determine what regulatory changes need to be made to prevent future economic crises.”
The leadership of the Senate Banking Committee, of which Dole is a member, planned and later cancelled a hearing scheduled for Tuesday, September 16 on the recent government takeover of Fannie Mae and Freddie Mac. Then, Committee leadership scheduled a hearing on recent bank failures and the response of federal regulators for Thursday, September 18, only to later cancel it. Another hearing slated for Thursday, September 18, focusing on improving accounting regulations, was also cancelled. After much confusion and delay, the Banking Committee leadership has now scheduled a hearing for Tuesday, September 23 focusing on turmoil in the housing and credit markets and related government actions.
“In addition to hearing from the Administration and federal regulators, I also firmly believe that the American people deserve to hear from the CEOs of the financial institutions that have threatened the solvency of the global financial system and imposed tremendous liabilities on the taxpayers,” said Dole. “These CEOs need to answer for their mismanagement, and provide Congress with a detailed accounting of what went wrong and how we can effectively regulate against a repeat occurrence.”
“And I absolutely demand to hear from the ousted CEOs of Fannie Mae and Freddie Mac who spent millions of dollars lobbying against the reforms I proposed to help prevent this crisis long before it started.”
Background
In the wake of Fannie and Freddie’s collapse, Dole helped introduce legislation to prohibit the payment of multi-million dollar “golden parachute” severance packages to the ousted CEOs of Fannie Mae and Freddie Mac. The Federal Housing Finance Agency soon after responded that there would be no lavish compensation for these executives.
Dole also helped introduce legislation to permanently ban Fannie Mae and Freddie Mac’s questionable lobbying practices.
In 2003, after it was revealed that Freddie Mac had misstated its earnings, Dole helped introduce legislation to strengthen oversight of the Government Sponsored Enterprises (GSEs). Fannie Mae and Freddie Mac responded in full force, dispatching an army of lobbyists to Capitol Hill to oppose the bill. In 2004, their lobbying tab totaled $26 million, and in 2005, it exceeded $24 million.
Dole helped reintroduce the GSE reform bill in the 109th Congress, and in July 2005 it was approved by the Senate Banking Committee but never considered by the full Senate. In the 110th Congress, Dole reintroduced the bill again with Sens. Chuck Hagel, Mel Martinez and John Sununu.
In response to the housing and mortgage crisis, Congress approved and the President signed into law in July 2008 a housing bill that created a stronger GSE regulator and provided the Treasury Department the authority to place Fannie and Freddie under conservatorship. Earlier this month, the Treasury Department used its new authority, and Fannie and Freddie are effectively under new leadership and have temporarily ceased lobbying activities, and their respective Foundations’ assets are under review.
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