IV 

110TH CONGRESS 

2D SESSION H. RES. 1452 

Establishing the Select Committee on Financial Bailouts. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 17, 2008 

Mr. GARRETT of New Jersey (for himself and Ms. KAPTUR) submitted the 

following resolution; which was referred to the Committee on Rules 

RESOLUTION 

Establishing the Select Committee on Financial Bailouts. 

Whereas for the first time since the Great Depression, the 

Board of Governors of the Federal Reserve System voted 

to open the Discount Window to investment banks; 

Whereas the Board of Governors of the Federal Reserve System guaranteed $29,000,000,000 of security liabilities of 

investment bank Bear Stearns; 

Whereas on July 30, 2008, the Housing and Economic Recovery Act of 2008 was signed into law and gave the 

Federal Government the authority to take over the Federal National Mortgage Association and the Federal 

Home Loan Mortgage Corporation; 

Whereas Treasury Secretary Henry Paulson testified before 

the Senate Banking Committee: ‘‘If you’ve got a squirt 

gun in your pocket, you may have to take it out. If 


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•HRES 1452 IH 

you’ve got a bazooka, and people know you’ve got it, you 

may not have to take it out.’’; 

Whereas on September 6, 2008, Secretary Paulson announced that the Secretary would use the new powers 

under the Housing and Economic Recovery Act of 2008 

to purchase up to $100,000,000,000 of preferred stock in 

each Government-sponsored enterprise as needed to ensure that each Government-sponsored enterprise maintains a positive net worth; 

Whereas on September 7, 2008, Federal Housing Finance 

Agency Director, James Lockhart, established a conservatorship for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation 

putting the Government in control of the companies; 

Whereas on September 18, 2008, the Washington Post reported ‘‘Fannie Mae, and to a lesser extent Freddie Mac, 

became enmeshed in the fabric of political Washington. 

They were places former government officials went to get 

wealthy—and to wait for new federal appointments. At 

Fannie Mae, chief executives had clauses written into 

their contracts spelling out the severance benefits they 

would receive if they left for a government post. The 

companies also donated generously to the campaigns of 

favored politicians. The companies’ political action committees and employees have donated $4.8 million to members of Congress since 1989, according to the Center for 

Responsive Politics.’’; 

Whereas the Board of Governors of the Federal Reserve System announced on Sunday, September 14, 2008, that it 

expanded the criteria of eligible collateral to be pledged 

at the Primary Dealer Credit Facility to securities below 

investment grade; 


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Whereas on September 17, 2008, Bloomberg News reported 

that Allianz SE, Europe’s largest insurer, made an offer 

to invest in American International Group Inc. that was 

rejected by the United States insurer 2 days before it accepted a Government takeover; 

Whereas on September 16, 2008, the Board of Governors of 

the Federal Reserve System authorized the Federal Reserve Bank of New York to lend up to $85,000,000,000 

to the American International Group (AIG); and 

Whereas on September 17, 2008, the Secretary of the Treasury announced the Treasury was going to lend money to 

the Board of Governors of the Federal Reserve System 

to help it meet its obligations: Now, therefore, be it 

1 Resolved, 

2 SECTION 1. SELECT COMMITTEE ON FINANCIAL BAILOUTS. 

3 (a) IN GENERAL.—There is hereby established the 

4 Select Committee on Financial Bailouts (hereinafter in 

5 this resolution referred to as the ‘‘select committee’’) to 

6 investigate the extraordinary actions taken by the Board 

7 of Governors of the Federal Reserve System and the Sec8 retary of the Treasury in 2008. 

9 (b) MEMBERSHIP.—The select committee shall be 

10 comprised of 10 members appointed by the Speaker, of 

11 whom 5 shall be appointed on the recommendation of the 

12 minority leader, as follows: one member of the majority 

13 party and one member of the minority party from the 

14 Committees on Financial Services, Ways and Means, En15 ergy and Commerce, and Oversight and Government ReVerDate Aug 31 2005 03:25 Sep 18, 2008 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\HR1452.IH HR1452

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1 form, and one member of each party from the leadership 

2 of the House of Representatives. 

3 (c) DUTIES.—The select committee shall— 

4 (1) investigate the actions taken by the Board 

5 of Governors of the Federal Reserve System with the 

6 support of the Secretary of the Treasury related to 

7 the March 16, 2008, sale of The Bear Stearns Com8 panies Inc., to JPMorgan Chase & Company; 

9 (2) investigate the actions taken by the Sec10 retary of the Treasury, with support from the Board 

11 of Governors of the Federal Reserve System on Sep12 tember 7, 2008, to place the Federal National Mort13 gage Association and the Federal Home Loan Mort14 gage Corporation, both Government-sponsored enter15 prises, into conservatorship; 

16 (3) investigate the actions taken by the Sec17 retary of the Treasury and the Board of Governors 

18 of the Federal Reserve System related to the pur19 chase of Merrill Lynch & Co., Inc. by the Bank of 

20 America Corporation on September 15, 2008; 

21 (4) investigate the actions taken by the Sec22 retary of the Treasury and the Board of Governors 

23 of the Federal Reserve System related to the bank24 ruptcy filing by Lehman Brothers Holdings Inc. on 

25 September 15, 2008; 


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1 (5) investigate the actions taken by the Board 

2 of Governors of the Federal Reserve System, with 

3 the support of the Secretary of the Treasury, related 

4 to the authorization of an emergency loan to the 

5 American International Group on September 16, 

6 2008; 

7 (6) investigate the oversight role of the Board 

8 of Directors of the Federal National Mortgage Asso9 ciation and of the Federal Home Loan Mortgage 

10 Corporation and their efforts to protect the interests 

11 of taxpayers and the appropriateness of their com12 pensation; and 

13 (7) investigate the role that political influence 

14 may have had on the oversight of the financial mar15 kets by both the Congress and the Federal regu16 latory agencies. 

17 (d) PROCEDURE.—Clauses 1, 2 (including paragraph 

18 (m) granting subpoena authority), 4, and 5 of rule XI of 

19 the Rules of the House of Representatives shall apply to 

20 the select committee. 

21 SEC. 2. REPORT. 

22 The select committee shall submit to the House, no 

23 later than December 31, 2008, a report— 


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1 (1) detailing the extraordinary actions taken by 

2 the Secretary of the Treasury and the Board of Gov3 ernors of the Federal Reserve System in 2008; 

4 (2) outlining the role that political activities 

5 and influence had in affecting the market conditions 

6 that led to the extraordinary actions taken by the 

7 Secretary of the Treasury and the Board of Gov8 ernors of the Federal Reserve System; and 

9 (3) recommending congressional action that 

10 would prevent the need for the Secretary of the 

11 Treasury and the Board of Governors of the Federal 

12 Reserve System to intervene in the capital markets 

13 in the future. 

Æ 


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