A few years ago when the gross incompetence with Enron occurred you had elected officials clamoring to hold someone accountable. Enron wanted to know about the executives and their part in the wrongdoings that bankrupted the company in a $600-million loss, swindled its shareholders, investors, and employees who thought their pensions were safe with Enron investments. Officials at the Justice Department were forming a task force to conduct a criminal investigation of Enron executives and at one point on Capitol Hill, there were five congressional panels looking into the company’s collapse.
Fast forward five years: Countrywide Mortgage reports a $1.2billion stock tumble after reporting that they were losing $1billion in mortgage defaults. According to the Washington Post
“In anticipation of future defaults, the company also took $2 billion in charges, including $934 million to fatten its reserves for bad loans. “
$1.6 billion in stock tanked, $1 billion in losses from defaulted mortgages and…. thus far the only Congressional investigation has been an ethics probe into whether members of the Senate Banking Committee received some “preferred deals.” The Securities and Exchange Commission is doing an “informal investigation” on Angelo Mozilo the CEO of Countrywide. I guess an informal investigation is better than no investigation.
In a discussion with author David Sirota and Thomas Frank on Bill Moyers, Frank agrees that an investigation is the next step, telling Moyers
“Another high profile Senate investigation of these guys. I would — hell, I’d go down there and help them do it. I mean, I’d volunteer right now.”
Sirota agreed saying it was part of the value of having a “a vibrant legislative branch.”
In March Sirota pointed out the double standard between GM CEO seeking federal bailout funds and Bank of America CEO.
” how is it that the White House is requesting the resignation of GM’s CEO while not doing the same of, say, Bank of America’s CEO? In fact, not only is the president not demanding the resignation of bank CEOs, he’s actually hosting them for photo ops at the White House. Sure, I know some bank CEOs resigned a few months ago under shareholder pressure, but the Obama administration has never publicly demanded such resignations of the current management that is making the problems worse, nor the resignation of management at the biggest firms (Goldman Sachs, BofA, etc.) that are still in place.
This is what I meant when I wrote in my column last week about a “government of men, not of laws.” It just doesn’t seem like there’s “equal protection under the law” – that is, it doesn’t sem like the same standards are being enforced from the White House onto different parts of the economy.”
But in the end, there has yet to be a meaningful prime-time Congressional investigation into the misconduct of Wall Street. My question is why?
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