By Richard Cowan
WASHINGTON (Reuters) - Top Republicans in the U.S. House of Representatives on Tuesday called for the appointment of a special counsel to investigate "fraud and mismanagement" at troubled mortgage giants Fannie Mae and Freddie Mac.
In a letter to Attorney General Michael Mukasey, they asked that such a probe examine the actions of a number of aides to former Democratic U.S. President Bill Clinton who later went to work for the two-government-sponsored enterprises.
House Minority Leader John Boehner and other House Republicans cited "fraud and mismanagement at Fannie Mae and Freddie Mac," along with missed opportunities to rein them in.
The Justice Department already is engaged in its own investigation and prosecutions related to the subprime mortgage crisis.
Justice Department spokesman Peter Carr said the agency will review the lawmakers' request. He added, "The FBI has acknowledged it is conducting a number of corporate fraud investigations; however, we do not discuss which individuals or companies may or may not be the subject of an investigation."
The Republican request for a special investigator came just two weeks before the November 4 presidential and congressional elections.
Boehner said that Democrats, who control Congress, "have refused to delve into these issues in a serious manner because they're afraid of political fallout."
House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, fired back in a statement noting that Republicans controlled Congress from 1995-2006 "and that is the period in which the absence of regulation, into which they want a criminal investigation, occurred." Frank added, "House Republicans appear to be demanding a criminal investigation of their failure to legislate."
He said that Democrats have been trying to advance reform Fannie Mae and Freddie Mac legislation.
October's Wall Street meltdown, which came in the wake of the government's seizure last month of Fannie Mae and Freddie Mac, has hurt traditionally anti-regulation Republican lawmakers.
With Republican poll numbers and stock prices falling, Democrats appear positioned to expand their majorities next month in the House and Senate.
Much of the Republicans' letter to Mukasey focuses on former aides to ex-President Bill Clinton, a Democrat. They are Franklin Raines and Jamie Gorelick, who subsequently became Fannie Mae executives.
"Because of the depth, sophistication and far-reaching impact of potential wrongdoing, we ask that you seriously consider the formation of an Enron-like task force or the appointment of a special counsel to spearhead the investigation," the Republican lawmakers wrote.
Earlier this year, Mukasey declined to establish a new task force to investigate mortgage fraud.
(Additional reporting by Randall Mikkelsen)
