Earlier this morning, we reported that the Justice Department is dragging its heels on a demand from Congress to hand over information compiled by a highly placed government monitor at AIG.
But DOJ’s recalcitrance is underlined by the approach of the SEC, which was also asked to turn over the monitor’s information. According to a source on the House Oversight committee, the SEC has said it’s complying with the request, and is expected to turn over the information shortly.
By contrast, as we reported this morning, the Justice Department told us it’s still reviewing the request, and gave no reason for the hold up, though we’re now two weeks past the deadline set by the committee.
At issue is information compiled by James Cole, a lawyer with Bryan Cave, who was placed as a government monitor inside AIG — reporting back to DOJ and SEC — as part of a 2004 deferred prosecution agreement after AIG had been charged with helping clients avoid taxes. As Oversight committee chair Ed Towns put it in his letter, Cole “had a seat at the table” for the string of cataclysmic developments at AIG over the last few years. Whatever reports or other information he compiled could therefore be of great value to investigators, like Towns, who are probing the causes of last fall’s financial collapse, which was triggered by the failure of AIG’s Financial Products unit.
There may be good reasons for the two departments’ different positions. The SEC absorbed a firestorm of public criticism late last year after failing to catch Bernard Madoff, and since then it has been eager to show Congress and the public that it’s getting tough on financial wrongdoing. Meanwhile, as we noted yesterday, DOJ is conducting a criminal investigation into AIG, so it may have an interest in keeping information close to the vest.
Still, the contrast is stark. We’ll stay on top of this…