By Silla Brush - 07/15/09 07:35 PM EDT
They include former lawmakers, business leaders and major party donors.
Democrats named former California State Treasurer Phil Angelides to serve as chairman of the Financial Crisis Inquiry Commission, while Republicans named former Ways and Means Committee Chairman Bill Thomas as vice chairman.
The panel will have wide-ranging subpoena power to investigate the causes of the crisis and must release a report by Dec. 15, 2010, with recommendations on how to prevent future meltdowns. The panel is modeled on a similar commission that investigated the causes of the Great Depression, as well as on the 9/11 Commission.
“The American people deserve nothing less than a full explanation of why so many people lost their homes, their life’s savings and their hard-earned pensions,” said House Speaker Nancy Pelosi (D-Calif.).
The commission’s work will come as Obama and Congress aim to revamp financial regulations in a major overhaul that could see new federal agencies established and others lose significant powers.
As Congress holds hearings and begins drafting legislation, some members are calling for a slower legislative process.
“We in Congress must first understand the root cause of the problem before we act so we can be sure to enact policies that address the issue and strengthen our economy,” said Senate Minority Leader Mitch McConnell (R-Ky.) in a statement.
House Financial Services Committee Chairman Barney Frank (D-Mass.) is holding hearings this month on the administration’s proposal to set up a Consumer Financial Protection Agency. The administration has released draft legislation to beef up the Securities and Exchange Commission (SEC) and also to register hedge funds.
Senate Banking Committee Chairman Chris Dodd (D-Conn.) said that lawmakers would work “simultaneously” with the commission. “Our work doesn’t stop with one bill this fall,” he said, referring to overhaul legislation the committee expects to take up later this year.
One of the key portions of the administration’s proposal, empowering the Federal Reserve to oversee risks across the financial system, has garnered stiff criticism from Democrats and Republicans.
On Wednesday, a report from former SEC Chairmen William Donaldson and Arthur Leavitt impugned the Fed’s credibility because of the “easy credit policies it pursued” that contributed to the crisis. Among critics’ worries is that the Fed’s responsibility to set monetary policy would be compromised by adding new powers to the bank.
The Fed will also come under scrutiny on Thursday when the House Oversight Committee conducts its third hearing into the role government officials played in Bank of America’s acquisition of Merrill Lynch at the height of the crisis. At issue is whether government officials, including members of the Fed, threatened to oust Bank of America management if it did not complete the deal. Fed Chairman Ben Bernanke denies making any threats, while former Treasury Secretary Henry Paulson will defend his tenure at the hearing.
In written testimony, Paulson said that had Bank of America pulled out of the deal, it would have shown “a colossal lack of judgment” and “would call into serious question” the bank’s leadership.
Lawmakers from both parties, including Reps. Darrell Issa (R-Calif.) and John Larson (D-Conn.) and Sens. Byron Dorgan (D-N.D.) and John McCain (R-Ariz.), had urged the creation of a financial commission since the end of 2008.
The panel will have the power to subpoena documents and testimony, although it must be with the agreement of at least one panelist appointed by Republicans.
Pelosi named two additional panelists: Brooksley Born, former chairwoman of the Commodities Futures Trading Commission (CFTC), and John Thompson, chairman of the board of directors of Symantec Corp.
Senate Majority Leader Harry Reid (D-Nev.) named former Florida Sen. Bob Graham (D); Heather Murren, retired managing director at Merrill Lynch; and Byron Georgiou, president of Georgiou Enterprises, a company with a wide range of business interests that include real estate and carbon emission reduction projects. Georgiou is also a major Democratic donor, while Murren and Thompson have given thousands of dollars to Democratic and Republican candidates, according to Federal Election Commission records.
House Minority Leader John Boehner (R-Ohio) named Peter Wallison, of the American Enterprise Institute. McConnell named former Congressional Budget Office Director Doug Holtz-Eakin, who was an adviser to McCain’s presidential campaign, as well as former National Economic Council Director Keith Hennessey.
Thomas, the vice chairman, is currently a senior adviser at Buchanan Ingersoll & Rooney, a law and government-affairs firm, though he is not registered as a lobbyist.