The man who will lead the special congressional effort to probe the causes of the financial crisis says his panel will also consider the government’s response to the events of last fall — including the controversial serial bailouts of AIG.
In an interview with TPMmuckraker, Phil Angelides, the former California treasurer who was recently named by Congress to chair the Financial Crisis Inquiry Commission, noted that the statute that created his panel required it to look not just at the financial institutions that failed, but also at those that would have failed but for massive government intervention. That means that “it’s going to be hard not to touch on those issues,” said Angelides, referring to the various AIG bailouts — which some have portrayed as disingenuous backdoor efforts to save AIG counterparties like Goldman Sachs and Merrill Lynch from the consequences of their bad bets — as well as other moves by the government to prevent a wider collapse of the financial sector.
Angelides — a Democrat who ran in 2006 for California governor and who was appointed by Nancy Pelosi to lead the commission — identified several broad areas that he expects the commission’s work to focus on: the failure of the regulatory system; the financial sector’s lending and securitization practices; the actions of the credit rating agencies; and fraud and abuse in the mortgage marketplace.
“It’s important to lay things out,” he said, “so that everyone takes a look at what happened, and asks themselves: ‘now that we know that, how will we act differently in the future?'” He added the commission has the power to refer evidence of criminal wrongdoing to state and federal law enforcement authorities.
Angelides — who has made a name for himself in part by pushing state pension funds to file lawsuits over corporate misbehavior — was at pains to stress his confidence that the commission can fully investigate the financial sector practices and regulatory failures that triggered the crisis, without regard for the political fallout. He brought up a TPMmuckraker story from last week in which we raised questions about the commitment of the panel’s Republican appointees, particularly vice chair Bill Thomas, to an aggressive probe, and countered that he expects his fellow commissioners to approach the task in good faith. Angelides said he concurred with a quote Thomas recently gave to his local paper, in which the former GOP lawmaker said that “we need to make sure success has behavioral consequences and failure has behavioral consequences.”
Said Angelides: “I’m going into this with the belief that regardless of party the people will be interested in seeking and finding the truth.” He added: “I actually would not have taken this on unless I believed that the commission as a whole could rise to the occasion.”
Angelides said that he and Thomas were already searching for “someone of credibility and respect” to serve as the commission’s staff director. Indeed, he received a call relating to the search during the interview.
And he sounded eager to get started. “I don’t think there’s any purpose served, no matter what party you are, in sweeping things under the rug,” he said. “Let’s get it out there.”
