Financial commission stuck

Democratic and Republican leaders have yet to nominate a single person to the high-profile commission aimed at investigating the financial crisis, even though it was signed into law by President Obama more than a month ago.

House and Senate leaders, responsible for naming all 10 members of the panel, say an announcement could come as early as this week so that the panel, with broad subpoena power, can begin looking into the causes of the crisis.

“We may have a joint announcement from the leadership by the end of the week,” said Jim Manley, spokesman for Senate Majority Leader Harry Reid (D-Nev.), on Tuesday.

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But the panel, modeled after the famed Pecora Commission from the 1930s, is off to a slow start and may have a limited impact as the administration and Congress aim by the end of 2009 to complete the biggest overhaul of the financial system since the Great Depression.

Compared to the 9/11 Commission, the “Financial Crisis Inquiry Commission,” signed into law by Obama on May 20, is struggling to get off the ground. President Bush signed the 9/11 Commission into law in November 2002, and although he had opposed it for several months, he named Henry Kissinger as chairman the same day. All 10 members of the panel were in place within three weeks, despite criticism that led Kissinger and Democrats’ first choice, George Mitchell, not to serve on the commission.

“We’re working through the process,” said Nadeam Elshami, spokesman for House Speaker Nancy Pelosi (D-Calif.). “This is a serious commission that requires serious candidates.”

But some Republican lawmakers are concerned about the seeming lack of urgency.

“There couldn’t be a more important and relevant time to jumpstart this commission,” said Kurt Bardella, spokesman for Rep. Darrell Issa (R-Calif.), an early supporter of setting up a panel. “You would think that there would be quick action to name the participants so the commission can begin its work.”

Pelosi and Reid each have three appointments, while Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader John Boehner (R-Ohio) each have two. Congress appropriated $8 million in June to pay for the commission, which must issue a report to lawmakers by Dec. 15, 2010. The bill setting up the commission was approved by a 92-4 vote in the Senate and a 338-52 vote in the House.

Issa wrote to Pelosi earlier this year asking to use one of her choices to ensure that the commission is split evenly between Democrats and Republicans. “We’ve taken steps to make sure everyone is on board,” Elshami said on Tuesday.

The panel cannot include current members of Congress or federal employees, and the chairman and vice chairman must be from different political parties.

Former Republican Sen. Fred Thompson (Tenn.) and former Republican Ways and Means Committee Chairman Bill Thomas (Calif.) are among those who have been considered, according to industry and congressional sources.

On the Democratic side, there has been discussion about Erskine Bowles, White House chief of staff under President Clinton, and Brooksley Born, former head of the Commodity Futures Trading Commission (CFTC).

The commission will have broad authority to look into nearly every aspect of the financial system, including accounting practices, state and federal regulators, monetary policy, executive compensation and derivatives.

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The commission can subpoena testimony and documents with agreement from at least one Republican-appointed member. The panel can also refer findings to federal and state law enforcement agencies for possible prosecution.

The panel’s work will come as the Obama administration pushes forward on a revamp of the financial system. On Tuesday, the administration unveiled draft legislation to create a Consumer Financial Protection Agency to oversee products such as credit cards and mortgage loans.

Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said on Tuesday that he hopes to draft and approve a bill in his committee on the agency by the August recess. Meanwhile, Frank and House Agriculture Committee Chairman Collin Peterson (D-Minn.) scheduled a hearing for July 10 with Treasury Secretary Timothy Geithner about new regulation of the derivatives market.