Rep. Darrell Issa Is On A Quest For the Truth

Congressman Darrell Issa did a good job today of dumbing down the complicated matter in which he is presently involved: congressional hearings on how the government (mis)handled the bailout of AIG in 2008.

"Like it is so often, it's not the failure of government, it's not what they did wrong — it's the cover-up," said Issa, a Republican from California. "In this case, we've discovered that the New York Fed, and eventually the entire Fed with Bernanke, had a pattern of not telling us what they were doing."

They also had a habit of not telling Fed Chairmen around the country what they were doing, which was paying 100 cents on the dollar for insurance policies from AIG that were worth virtually nothing, and then covering it up.

"They paid what is, by anyone's stretch of the imagination, far more than you or I would have paid if we walked in to bail out the banks," Issa told Imus.

Issa called the New York Fed's actions "a back door bailout," because it used taxpayer money to underwrite overpriced insurance policies that paid banks around the world, including Goldman Sachs, $62 billion that they never have to repay.

Warnings from people within the Fed system went ignored by Chairman Ben Bernanke, and by then New York Fed Chairman and current U.S. Treasury Secretary Timothy Geithner, who has claimed ignorance. But if he wasn't involved, who was? And where did the money go?

"That's the best question," said Issa, the ranking member of the House Oversight and Government Reform Committee. "What we have is a table of some very interesting numbers that have been redacted and sealed until 201, by request of the Fed through AIG."

Those numbers would show what kind of financial instruments were purchased, and to whom the money ultimately went. "Even though it went to these banks, in many cases it continued on," said Issa.

He is determined to lift the veil of secrecy from the Federal Reserve. Issa plans to ask Geithner today why the American people should trust one person — him — with even more of their money, given what happened at the New York Fed under his watch.

"They're talking about being able to take over corporations that aren't even banks," said Issa. "Is this really appropriate considering how they did it the last time, when they had a blank check from the American people?"

As a member of the minority party, all Issa can do is shed light on issues, and hope public opinion does the rest. He pushed hard to get these hearings in the first place, and pointed out that bipartisanship played a role; Democratic Congressmen like Elijah Cummings and Dennis Kucinich also want to "slow down this train," Issa said.

"Dennis Kucinich," said Imus. "That's a weird dude, isn't it?"

-Julie Kanfer