By Robert Borosage
Today the new Financial Crisis Inquiry Commission, modeled after the New Deal-era Pecora Commission, begins its investigation into possible misconduct by the financial sector causing last year’s market meltdown. Campaign for America’s Future co-director Robert Borosage released the following statement on what the commission needs to do to fulfill its mission. Below that is a set of recommendations proposed by 40 organizations to the Commission in a letter today.
Statement from Robert L. Borosage
We are pleased that the Financial Crisis Commission is coming together, under the leadership of chair Phil Angelides. It has enormous challenge before it.
As Phil suggests in his opening statement, the Commission should aspire to be the modern day version of the Senate Banking Hearings in the 1930s that came to be named after the chief counsel, Ferdinand Pecora.
In the 1930s, Wall Street excesses, fraud, and speculation helped feed a bubble that burst and contributed to the Great Depression. FDR stepped into save the banks, reorganize them, and stave off financial panic.
But once saved from ruin, the banks rallied, seeking to fend of any serious regulation. Pecora changed that. By exposing the bankers’ misdeeds to the public, by revealing the crimes and the abuses, he helped rouse public anger, and create the conditions for the vital reforms – from the Glass Steagall Act to the SEC – that helped preserve us from financial crises for several decades.
Now once more, Wall Streets crimes and excesses, speculations and frauds have helped drive this economy off a cliff. Government has bailed out the banks and saved them from ruin. Now once more, they are organizing to fend off the reforms vital to making certain we don’t repeat the follies of the past.
The Angelides Commission — if it fearlessly lays out the facts, exposes the excesses, the deformed incentives, the frauds and crimes, that are at the root of the current crisis has the potential of playing a similar role to that of Pecora.
Today CAF joins with 39 other groups, including the AFL-CIO, Change to Win, Americans for Financial Reform, Public Citizen and others, to call upon the Commission to tell Americans the story of what happened. We urge them to hold public hearings, to reveal records, to subpoena documents and miscreants, from Wall Street’s leaders to mortgage brokers. We urge them to make criminal referrals where appropriate.
We will help publicize their work. We’ll engage citizens to augment their capacity. Nothing is more important than getting to the roots of what happened, and telling that story to Americans, generating the public pressure that can overcome the powerful financial lobby to push Congress to pass the financial reforms vital to making certain we do not repeat the follies of the past. not happen again.
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Letter to Phil Angelides, chairman of the Financial Crisis Inquiry Commission
Dear Chairman Angelides,
At the beginning of your term as chairman of the Financial Crisis Inquiry Commission we write on behalf of tens of millions of Americans concerned about their economic well being and financial security.
While the Congress has given you a specific charge, there is a great deal of discretion granted the Commission in how it conducts its business. We call on the Commission to consider and adopt the following recommendations.
The Commission should make it clear to Congress, the administration and the regulatory bodies that they shouldn’t wait for the Commission ‘s final report to take action.
The Commission should issue interim reports and memoranda so the public has an opportunity to learn about what caused the financial crisis while the national discussion is taking place.
The Commission should hold public hearings across the country—especially in the areas hardest hit by the crisis.
The Commission should listen to the voices of the victims—regular Americans should be heard, not just financial and economic elites.
The Commission should use all its powers including subpoena and the authority to make criminal referrals.
The Commission should act in a transparent way—use the Internet to publish your findings, including the documentary evidence that supports those findings.
The Commission should name names—the public has a right to know who the people and institutions are that acted in an irresponsible manner—especially if they are still in positions of authority or influence.
Together these recommendations would greatly improve how the Commission would serve the public interest. We look forward to your deliberations and wish you luck in all your work.
A New Way Forward
Americans for Fairness in Lending
Americans for Financial Reform
Campaign for America’s Future
Center for Responsible Lending
Change to Win
Community Reinvestment Association of North Carolina
Connecticut Citizen Action Group
Empire Justice Center New York
International Brotherhood of Teamsters
Jobs with Justice
Laborers International Union of North America (LIUNA)
Leadership Conference on Civil Rights
MoveOn.org Political Action
National Association of Consumer Advocates
National Community Reinvestment Coalition
National Consumer Law Center (on behalf of its low income clients)
National Fair Housing Alliance
Neighborhood Economic Development Advocacy Project
New Jersey Citizen Action
New York Public Interest Research Group (NYPIRG)
Progressive States Network
Sargent Shriver Center on Poverty Law
Service Employees International Union
U.S. Public Interest Research Group
United Food & Commercial Workers International Union
Western States Center
Americans for Financial Reform is a national coalition of nearly 200 state and local organizations ranging from financial experts to community working to restore fairness and stability to the financial system and rebuild our economy.