Federal regulators "looked the other way" while Wall Street firms engaged in dubious practices that led to securities charges against Goldman Sachs, the senior House Republican on financial issues said Tuesday.



Rep. Spencer Bachus (Ala.), the top Republican on the House Financial Services Committee, also suggested there was a certain amount of "cooperation and conspiracy" among large financial firms and regulators.



Bachus asserted that officials at Treasury or the Federal Reserve might have known about similar cases at other institutions, though he didn't specify during which administration he suspects the cooperation to have taken place.



"You have to believe the Fed knew about it; you have to believe the Treasury knew about it. You have to believe that there were people at the Fed and the Treasury that were cooperating with all of this," he said during an interview with CNBC. "And the whistle should have been blown, and it wasn't."



Goldman was hit with civil charges by the Securities and Exchange Commission (SEC) on Friday. The SEC charged Goldman with selling a securities-based product to its clients without disclosing that the hedge fund manager who'd helped devise the product had bet on it to fail.



The SEC approved the charges, reportedly on a party-lines vote, and they have become a central part of the debate in Washington over financial regulatory reform.



"What I would say is that I think the bigger question is maybe not what happened in this case," Bachus said of the Goldman case. "But, I think it's becoming apparent that since at least 2004, the regulators looked the other way, and there was a certain amount of -- I don't know if you call it cooperation or conspiracy -- between some of the large companies to cover their tracks."

