Mica & Congressional Leaders Call for Special Counsel

Washington, D.C. – U.S. Rep. John L. Mica (FL-07) and other Congressional leaders have called on the United States Attorney General to appoint a special counsel or task force to investigate the role Fannie Mae, Freddie Mac and their executives played in causing the nation’s subprime mortgage meltdown.  Problems originating in those government-backed financial agencies initiated problems in the mortgage industry and are widely acknowledged to be at the root of today’s financial turmoil.

“Those who ripped off taxpayers, hauled away millions of dollars in bonuses and received corrupt gifts, must be held accountable,” Mica said.

“For years, I and other GOP members have called for reform at Fannie Mae and Freddie Mac.  The record is clear that over the past eight years, Democrats have consistently blocked those efforts,” continued Mica, the Republican Leader of Transportation and Infrastructure Committee, the largest committee in Congress.

“Individuals in government backed financial agencies, elected officials and others who defrauded or acted corruptly must be brought to justice.  Until a special prosecutor or Department of Justice task force reviews the fraud and mismanagement that took place at Fannie and Freddie, justice will not be served.  It’s time we hold those accountable responsible for their actions and thoroughly investigate these problems and possible crimes.

Mica said he would like the special prosecutor to look at the actions of former Fannie Mae Chairman Franklin Raines – who allegedly received approximately $100 million by cooking the books of that agency – along with Jamie Gorelick, recently disclosed to have received more than $26 million from Fannie.  Both received special VIP discounted mortgages from Countrywide, the largest subprime mortgage producer in the country.  These loans were similar to the VIP loans Countrywide extended to Chris Dodd, the Democrat Chairman of the Senate Banking Committee.

In 1999, Mica voted to prevent banks to engage in speculative investments.  In 2002, Mica and U.S. Rep. Christopher Shays (R-CT) cosponsored Republican legislation to bring Fannie Mae and Freddie Mac under the regulation of the Securities and Exchange Commission.  In 2004 and 2005, Mica supported legislative efforts to bring Fannie Mae under control.  That legislation was unanimously opposed by Senate Banking Committee Democrats, and kept from a final vote by Fannie Mae lobbyists who worked to defeat the measure.

In writing to U.S. Attorney General Michael B. Mukasey, Mica and other Republicans state that an “urgent and focused effort led by a task force or special counsel is necessary in order to ensure that the wrongdoers do not profit from their actions and to restore public confidence in this sector of the financial markets.”  (See attached letter.)

“Hard-working Americans have had trillions of dollars in retirement accounts, savings and investments wiped out, in part because of the infamous leadership and practices at Fannie and Freddie,” Mica added.  “We must get to the core of this issue and prevent another crisis like this from happening in the future.”

In addition to being the Republican Leader of the Transportation and Infrastructure Committee, Mica is a senior member of the Oversight and Government Reform Committee.  He has participated in that committee’s initial hearings on the mortgage crisis, and has expressed concern that the hearings scheduled to date are glossing over the core problems that led to the economic meltdown.  Mica concluded, “While our Congressional hearings are important, even more important is holding accountable the offenders that led us into this financial fiasco.”

Click Here for House Minority Leader, John Boehner’s statement on the letter from House Republicans to Attorney General Michael Mukasey.

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