WASHINGTON -- Rep. Brad Miller (D-N.C.) blasted congressional Republicans on Thursday, including fellow North Carolinian Rep. Patrick McHenry, comparing them to the notorious Keating Five, five senators disgraced for intervening to protect financial fraud felon Charles Keating from regulatory scrutiny in the 1980s.
Miller's consternation comes after the Nation obtained a letter sent by McHenry to the new Residential Mortgage-Backed Securities Working Group -- a panel tasked with investigating banking fraud associated with the 2008 Wall Street crash. Miller argued that McHenry and other Republicans are improperly interfering with regulation and criminal investigation of the financial industry.
"There's a pattern here," Miller said in a statement released to the Nation and HuffPost. "Congress has a proper oversight role even into criminal investigations, but there’s a point where oversight ends and interference begins. I really cannot see a difference between what congressional Republicans are doing now to hinder regulatory and even criminal investigations of the financial industry, obviously on behalf of the industry, and what the Keating Five did a generation ago.
"I suspect that what is different is not the conduct but the ethical standards in Congress, and even more disturbing, what the nation expects of Congress," Miller continued. "A generation ago regulators made a grave error in giving in to political intimidation. I hope the Department of Justice will not repeat that error."
Miller wrote his remarks in response to a letter the Nation exclusively obtained in which McHenry reportedly asked the the working group seven questions and emphasized that the House Oversight and Government Reform Committee has the authority to investigate "any matter" it chooses.
In his letter, McHenry asked the new Working Group how its work will differ from the Financial Fraud Enforcement Task Force created by Obama in 2009. "Please distinguish in detail how the work of the Residential Mortgage-Backed Securities Working Group will differ from the existing work of the Financial Fraud Enforcement Task Force," McHenry wrote, adding, "[H]ow will the Residential Mortgage-Backed Securities Working Group achieve different results?"
Many of the questions that McHenry asks of the working group are shared by foreclosure fraud watchdogs, regardless of affiliation. Since President Barack Obama announced the new task force in January to investigate the mortgage and banking industries following the 2008 crash, some liberal activists have called the effort a "sham." New York State Attorney General Eric Schneiderman, one of the group's co-chairs, has defended its activities.
Miller told the Nation that he believes he himself was passed over for a top post on that anti-fraud squad over Republican concerns that the financial industry would not approve of his appointment.
More than 1,000 financiers were jailed for fraud in the aftermath of the savings and loan crisis, including executives with political connections like Keating. No one from any of the major Wall Street firms involved with the much larger 2008 financial collapse has been charged with a crime.
UPDATE: April 27, 11:20 p.m. --
Ryan Minto, press secretary for Rep. Patrick McHenry, sent HuffPost a written response: "After the Department of Justice refuted the fictitious assertions of any sort of industry influence, Mr. Miller should be ashamed of himself for using the plight of struggling homeowners for his partisan political attacks," Minto wrote.
"As Congressman McHenry’s letter notes, even former SIGTARP [official] Neil Barofsky stated that he was 'puzzled' by the creation of the working group and referred to it as 'political rebranding of existing efforts.' The Department of Justice rightly labeled the letter for what it is -- standard oversight."
Ryan Grim contributed reporting.
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