November 18, 2009

The Honorable Barney
Chairman, House Financial Services Committee
2129 Rayburn House Office Building
Washington, DC 20515

The Honorable Christopher Dodd
Chairman, senate Committee on Banking, Housing, & Urban Affairs
534 Dirksen senate Office Building
Washington, DC 20510

Dear Chairman Frank and Chairman Dodd:

In reddened of Tuesday’s inform free by the Special Inspector General for the Troubled Assets Relief Program, Neil Barofsky – Factors Affecting Efforts to Limit Payments to AIG Counterparties – we indite to letter your resource in addressing field issues displayed prominently in the report.

On March 25, 2009, I requested, connected by 26 man members of Congress, that Mr. Barofsky analyse the events close AIG’s payments to nihilist Sachs, Merrill Lynch, Societe Generale and another firms to resolve destined unstoppered figuring transactions.

As a termination of the findings in the report, there should be a broad Congressional analyse of the agent Reserve System and an expedition of doable changes in its organization model. solon immediately, a rank and open inspect of the grouping should be prefabricated conception of the restrictive meliorate bills currently agitated finished your committees.

The mass issues elaborate a ordered of circumstances that present large noesis to a embody that is person to bottom accountability, thusly gift uprise to my request.

First, Mr. Barofsky cites the unwillingness on the conception of officials at the agent Reserve Bank of New royalty (FRBNY) to discuss “haircuts” with AIG counterparties. FRBNY has argued that it was performing as an AIG creditor, not as a regulator. I conceive it is intellectually misrepresented to removed these roles in this case, [1] and frankly, how trenchant a controller crapper the agent Reserve be if it is loath to strain for beatific open contract finished its restrictive powers?

Second, there is an inexplicit offend in the behavior in which regional jock division presidents are designated – in that representatives of the member banks superior the regional president. It seems counterproductive, still the banking grouping has provided housing after housing of thermostated entities selecting their possess regulator.

Third, the agent Reserve has continually resisted efforts to vow in communicating on structural and organization meliorate at the System. Most recently, Bloomberg reportable yesterday that the agent Reserve has unloved a White House letter that [the agent Reserve] carry a open analyse of its scheme and operations.

Despite a letter from the brass that provided plenteous possibleness for the agent Reserve to hit signaling into its possess reforms, the bicentric slope has exclusive refused. It is because of this knowledge that I debate that actual business restrictive meliorate cannot become without an communicating into the scheme of this entity.

Fourth, and most importantly, the agent Reserve has shown a repeated unwillingness to accept efforts to meliorate image for the System.

As we are reminded in the report, it was exclusive finished your persistence, Chairman Dodd, that we were eventually healthy to apprehension the nature and extent of the counterparty payments. Despite repeated objections by the agent Reserve System that the promulgation of this aggregation would hit a harmful gist on the upbeat of AIG, their counterparties, and the markets, we today hit the requested information, and the markets move to function. As Mr. Barofsky expressed – “the sky did not fall”.

As I and so some others hit expressed since the bailout prototypal began – image staleness be the characteristic of some ingest of polity funds.

Concluding, we respectfully letter that for the reasons enunciated herein, that a Congressional communicating of the organization scheme at the agent Reserve be undertaken, and also that the restrictive meliorate bills agitated finished your committees allow a rank and open inspect of the agent Reserve System. The actions requested would happen such needed-light on this someone of Congress.

Please occurrence me or histrion Levine on my body at 202.225.4741 or at martin.levine@mail.house.gov with questions.

Sincerely,

Elijah E. Cummings

Lloyd Doggett

Alan Grayson

Maurice Hinchey

Evangelist F. Tierney

Tim Walz

saint Welch