A Response Letter from Sen. John Cornyn (R) Texas

This letter was written in response to A Letter to My Elected Officials about the government's plan to help the economy.

Dear Mr. English:

Thank you for contacting me about the current financial crisis. I appreciate having the benefit of your comments on this matter. I, like many Texans, am angry and frustrated that the United States is in the current financial crisis. As a strong supporter of the free market, I am opposed to unnecessary government intervention in the economy. As you know, the federal government has recently taken several steps to ensure that our financial system remains stable for the growth of our economy. Any actions by the federal government must be temporary and limited. Furthermore, any taxpayer money that is used to support our troubled economy must be subject to strict oversight and be repaid—in full—to the American people. Hard-working, financially responsible Texans should not have to pay for the irresponsible behavior of corporate executives who abused their positions. These executives must now be held fully accountable under the law.

The current financial crisis was caused, to a large extent, by Fannie Mae and Freddie Mac—two government sponsored enterprises that played a central role in the much maligned mortgage market by guaranteeing loans to individuals who could not pay them back. Together, these two agencies own or guarantee nearly half of the nation’s $12 trillion mortgage market. I have long advocated that Congress reform both Fannie Mae and Freddie Mac in an effort to protect taxpayers. In 2006, I urged the Senate Majority Leader to bring reform legislation before the full Senate after reports that Fannie Mae intentionally overstated its earnings by $10.6 billion. This reform legislation would have increased oversight and taken steps to protect taxpayers from the risk that Fannie Mae and Freddie Mac posed to our economy. Regrettably, the Senate did not consider these reforms because special interest groups lobbied their Congressional allies to prevent this legislation from being debated.

Furthermore, risky business practices by irresponsible financial institutions have caused great stress on our credit market, limiting the amount of credit available to both individuals and businesses. America’s system of credit is the lifeblood of our economy as it affects thousands of purchases and investments made in our country each day. Without access to credit, small businesses cannot pay their employees and working families cannot receive the loans necessary to send their children to college or purchase a new home or car. It is critical for our economy that the financial crisis be prevented from spreading to families and businesses across Texas which would result in many Texans losing their jobs, diminished college funds for their children, and a loss of hard-earned retirement savings.

Finally, it is imperative that all parties associated with the current financial crisis are aggressively investigated and that any corporate executives found to be involved in criminal activities are swiftly prosecuted. I intend to ensure that a thorough criminal investigation is conducted and that those responsible for violating any criminal laws of the United States are held accountable. As such, I have called on the Attorney General to begin a criminal investigation of executives at Fannie Mae and Freddie Mac. It is because of their poor—and possibly criminal—business practices that American taxpayers and our nation’s economy are in jeopardy. Soon after the Attorney General received my request, the Federal Bureau of Investigation announced an investigation of Fannie Mae, Freddie Mac and multiple Wall Street financial firms.

I appreciate the opportunity to represent Texans in the United States Senate and you may be certain that I will keep your views in mind as the 110th Congress draws to a close. Thank you for taking the time to contact me.

Sincerely,
JOHN CORNYN
United States Senator517 Hart Senate Office Building
Washington, DC 20510
Tel: (202) 224-2934Fax: (202) 228-2856
http://www.cornyn.senate.gov/