Ferdinand Pecora, the tough New York prosecutor who took on Wall Street following the collapse of the Great Depression, wrote in his 1936 memoirs:
"Legal chicanery and pitch darkness were the banker's stoutest allies."
The ghost of Ferdinand Pecora -- and indeed, of Franklin D. Roosevelt himself -- can be sensed in Washington, D.C. this week as Congress names the members of the Financial Crisis Inquiry Commission - the modern-day version of the Roosevelt era "Pecora Commission." Tasked with uncovering "all causes, domestic and global, of the current financial and economic crisis in the United States," the newly named commissioners have an historic opportunity to pave the way for meaningful reform.
To encourage the inquiry to live up to the experience of the 1930s, and to the expectations of the millions of Americans who continue to suffer under the weight of the currently broken and imbalanced economy, the Roosevelt Institute has launched an open letter and petition drive at www.whatcausedthecrisis.com, directed at the newly formed commission.
By taking lessons from the original Pecora Commission in its design and execution, the FCIC can ensure that its inquiry provides the insights needed to understand what caused the crisis and in so doing to protect the nation from future collapses.
Working with historians, law professors, economists and other scholars, we've developed three guidelines that we are asking the commission to follow. Without these measures, there is a danger the commission won't have enough "teeth" to truly get to the bottom of what and who caused the most recent crisis. From the open letter:
- Appoint a single investigator. This individual must have a proven record of exposing fraudulent elites and institutions, and must provide a professional, non-political spirit to the investigation.
- Afford no special treatment. No one is off-limits or gets special protection in the investigation.
- Provide the tools to do the job. The investigator must be given ample budget and time, full subpoena authority, and the ability to hire and fire staff.
The history of the Pecora Commission teaches us that a single investigator with the drive and freedom to find the truth -- reaching to the highest levels of Wall Street and the financial sector without impunity -- can uncover the conflicts of interest and fraud that brought down the nation's economy. It is clear that the same bright light of day needs to be shone on the people, institutions and practices that led to the most recent collapse.
We hope that these opportunities are afforded the new commission.