Suspecting politics in Goldman Sachs charges, Rep. Issa asks SEC for information

Wednesday, April 21, 2010

Republicans on the House Oversight and Government Reform Committee are looking into whether the Securities and Exchange Commission was motivated by politics in filing civil charges against Goldman Sachs last week. Rep. Darrell Issa (R-Calif.) sent SEC Chairman Mary Schapiro a letter Tuesday asking for documentation of "any sort of prearrangement, coordination, direction from, or advance notice" between the SEC and the Obama administration or congressional Democrats.

The charges against Goldman, which allege that it withheld key information from investors in a complex mortgage-based investment product, have given extra momentum to Democrats' efforts to overhaul financial regulation. GOP speculation that politics could have been involved in the decision to file suit came after reports that the two Republican SEC commissioners voted against bringing the charges.

While its chairman and commissioners are appointed by the president, the SEC is an independent agency that is supposed to act without regard to politics in enforcement matters.

"The American people have a right to know whether the Commission, or any of its officers or employees, may have violated federal law by using the resources of an independent regulatory agency to promote a partisan political agenda," Issa said in a statement.

An SEC spokesman declined to comment on Issa's request.

-- Neil Irwin and Zachary A. Goldfarb

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