Financial Crisis Commission Needs to Get to Work

Have you heard of the Financial Crisis Inquiry Commission? If not, that's because this Commission with responsibility for investigating the financial crisis has so far failed to get to work. Last May Congress passed legislation creating the Commission with a broad mandate and specific powers including subpoena, public hearings, cross examination of witnesses under oath and even criminal referrals.

Where are the hearings? Where are the subpoenas? Where are the criminal referrals? Millions of people are out of work because of the casino economy setup by some in the financial sector.

So far, the Financial Crisis Inquiry Commission isn't living up to expectations. It has been eighteen months since the market crashes, fifteen month since the Madoff frauds were exposed, nearly ten months since Congress created the Commission and eight months since commissioners were appointed.

To date the Commission has held one public hearing with witnesses and then a forum recently with professors and academicians. No victims have had a chance to talk. No subpoenas have been issued. There is no real way for the public to give input.

With one in six Americans looking for work, the Commission can't be allowed to whitewash the failure and complicity of the SEC and other government regulators. The Commission needs to assign blame where blame is due, and bring the wrongdoers to justice.

It didn't have to be this way. The hopes for the Commission harkened back to the Pecora Commission of the 1930s whose findings led to passage of Glass-Steagall, the Securities Act of 1933 and the Securities Exchange Act of 1934. Others were thinking of the role the 9/11 Commission played in pulling together a scrupulous accounting of the terrorist attack.

The victims of the hit and run economic crimes of this period expect and deserve much more. Years from now, there will be ample time for a leisurely stroll through the history of this crisis. Now is the time for action--investigations, prosecutions and more.

That's why a group I lead as Chairman, Accountable America, is working with victims of the Bernard Madoff frauds and others to push for investigation with teeth. Accountable America is sponsoring TV, radio and print ads, and organizing phone banks and public events.

Many Madoff victims see the lackluster government response so far as yet another form of financial abuse. One indirect Madoff investor, Suzanne Webel, who lost her life savings, said:

"We were robbed first by Madoff...and now by the government for failing to respond to our plight. We want the Financial Crisis Inquiry Commission to get to the bottom of this mess - we want a hearing on our issues and a commitment to compensate ALL victims fairly."

Accountable America sent a letter to Commission Chairman Phil Angelides and Vice-Chairman Bill Thomas, urging them to get serious about achieving their mandate. The letter aired several concerns:

  • The Commission has made no commitment to hearing from the victims of Madoff frauds, other failed institutions or the broader financial crisis - despite a specific Congressional mandate to investigate these frauds. Victims deserve a full airing of their concerns.
  • The Commission has not issued a single subpoena for current or former regulators who were either asleep at the switch or complicit in the financial crisis. Among many others, former S.E.C. Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and former Chairman Alan Greenspan should all be subpoenaed and cross-examined.
  • Testimony from academic experts is not enough. Too much time has been spent preparing for academic study instead of conducting investigations - which are the true intent of the Commission's Congressional mandate.
  • The schedule and pace of work is too slow. Since July 2009, the Commission has only met in public three times. The first hearing with witnesses occurred just a month ago. If specific members of the Commission are dragging their feet or unwilling to work at an appropriate pace, they should be called to account publicly.
  • The American people deserve clearer notice of the date, time and place of the Commission's meetings. The time of day for the most recent forum was announced only two days before it was held, and its location had inadequate space for the public. The Commission should announce a draft schedule of hearings with dates and locations for the rest of the year and ask for public input.
  • Not a single subpoena has been issued. This is one of the Commission's most powerful tools, and it should not be left unused.
  • If the reason for inaction is lack of resources, the Commission should publicly ask for what they need. Their work is too important to fall victim to indolence or red tape.

With the Commission's report due in December, there is still time to get on track -- but the clock is ticking.

Reflecting on his work in 1939, Ferdinand Pecora wrote:

Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker's stoutest allies.

Pecora's singular focus on truth-finding did justice to victims and safeguarded America's economy for decades to come.

Chairman Angelides and the other nine members of the Financial Crisis Inquiry Commission have a choice to make.

They can continue to conduct a toothless, academic exercise that holds no one accountable.

Or they can learn the lessons of the past and bring the disinfecting power of sunlight to the shadowy corners of our financial system where greed lies in wait to strike again.