The New Truth-Teller?

Phil Angelides, the former state treasurer of California, is a
tough-minded liberal with hands-on knowledge of high finance and the
social contradictions in modern capitalism. So it is remarkable that
Angelides has been chosen to chair the Financial Crisis Inquiry
Commission newly created by Congress. The commission has enormous
potential to generate deeper reforms than anything President Obama has
yet proposed, simply by digging out the hard facts of what caused the
financial collapse.

In honest investigation--like the Pecora hearings that famously
revealed the truth of what caused the Great Depression--could splash
embarrassment on both political parties and turn up shocking evidence of
the political collusion between Washington and Wall Street. But can we
really expect such a truth-telling creature to emerge from Congress?
Maybe we can. The appointment of Angelides is a very promising start
because of his record as an aggressive reformer on issues like corporate
governance, social equity and environmental reform. The danger is that
the Angelides commission will be paralyzed by the usual hard-nosed
tactics of Washington partisans.

Angelides was named by Democratic congressional leaders, but Republicans
picked four of the ten commission members and chose a relentless
partisan
as the vice chair--former Representative Bill Thomas. Thomas was Ways
and Means
chairman in the Bush years, well-known for his intellectual brilliance
and his take-no-prisoners legislative tactics. Angelides must get
Thomas's consent on staff appointments, particularly the crucial job of
chief investigator. Issuing subpoenas will require support from at least
one of the Republicans. "I talked with Bill Thomas," Angelides said.
"His view is our job is tell the truth. Let's surprise people."

Angelides is hopeful the commission will surprise skeptics--if it
sticks to the task of digging out the facts. "Given the extent of harm
that has been done to so many people and the damage done to our system,
my hope is that people will rise to the occasion and do the right
thing," he told me. "Probably, there's a lot of nervousness out there as
to what rocks might be turned over, because there will be Democrats who
will be nervous about those facts too. We have to dig deep and get to
the root causes, and we have to do this in a way that's understandable."

The best evidence of Angelides's authentic values is that, as state
treasurer, he was endlessly attacked and ridiculed by the Wall Street
Journal. Angelides was a pioneer among state treasurers in
mobilizing the financial-market power of CalPERS and CalSTRS,
California's mammoth pension funds for public employees and teachers.
Those funds repeatedly used their weight to challenge Wall Street firms
and corporate managements on the soundness of investment strategies and
the financial system's disregard for larger social consequences,
including ecological destruction. He ran for governor and lost in 2006,
then returned to his private life as a real estate developer (a joint
venture with Magic Johnson to build affordable rental housing in Los
Angeles) while also serving actively as chairman of the Apollo Alliance
for a green economy.

During the Bush years, when Angelides articulated his views on
capitalism, he sounded downright quaint. In a Nation
article I did four years ago on pension-fund power, Angelides
explained his perspective: "I would make the case--this comes from my
experience in real estate--that the best, most highly regarded
companies are the ones that are profitable and also produce products
that are of utility to society, that increase our productivity and
enrich our lives. When people step back and ask what they most want to
see in the private sector, it is both profitability and good results for
society. There is no reason capital shouldn't be held to the same
standard."

If Phil Angelides applies that standard to his commission's inquiry, we
will see one bombshell after another.