Pelosi eyes a GOP pick for panel

WASHINGTON - House Speaker Nancy Pelosi said yesterday she was considering appointing a Republican to the new independent commission that will investigate the cause of the financial meltdown.

Doing so would raise the likelihood that the bipartisan panel would be split evenly among Republicans and Democrats.

Under antifraud legislation President Obama signed this week, Pelosi and Senate Majority Leader Harry Reid will appoint six people to the 10-member panel. Republican leaders are allotted the remaining four appointments, an uneven split that has called into question whether Democrats will hold too much sway.

"To tell you the honest truth, one of the people that I would like to appoint the most to the commission is a Republican," Pelosi told reporters at a news conference.

The focus will be on getting "the best possible people," she said.

Democrats are comparing the Financial Markets Commission to the high-profile panels that investigated the Sept. 11 attacks and the Iraq war. Those panels were equally split, with five Democrats and five Republicans in each case.

One choice for appointment would seem to be Jim Leach, a former Iowa Republican congressman who led the House banking committee. Leach, a moderate, endorsed Obama's campaign and represented the president at a global economic summit last fall.

Pelosi did not offer any names, and aides said Leach was not being pursued.

Leach, now a visiting professor at Princeton University, said it would be inappropriate to comment on whether he had been approached. But he indicated his support for creation of such a commission.

"Congress did inadequate oversight in the past," he said yesterday. "There's clearly catching up to do."

The commission will be given $5 million to study how the government failed to protect investors and the role financial fraud may have played in the meltdown, which began in 2007 when a growing number of homeowners - especially those with poor credit histories - defaulted on their mortgages. It spread last year to banks, which cut back sharply on making the consumer and business loans that lubricate the nation's economy.

The panel also will issue recommendations on reforming regulation of the financial markets and other steps to salvage the economy.

Lawmakers say they won't wait for the group to issue its findings in December 2010 before moving forward on their own ideas. The House Financial Services Committee plans to take up legislation in June that would give the government authority to wind down nonbank institutions like AIG that have threatened the financial system.