Among the many working groups, agencies and commissions charges with assessing blame for the latest financial imbroglio is: The Financial Crisis Inquiry Commission (FCIC). It is worth watching how this commission performs.

Phil Angelides (former California state treasurer and the 2006 Democratic nominee for California governor) was named as Chairman of the Commission. Other members include:

Democrats:

Byron Georgiou, a lawyer with a major securities litigation firm and a business owner

Brooksley Born, a former financial regulator (CFTC) under President Bill Clinton who was an early and vocal proponent for derivatives regulation in the 1990s

Bob Graham, a Florida Democratic Senator

Heather Murren, a retired managing director at investment bank Merrill Lynch; and

John W. Thompson, chairman of Symantec Corp., a business-software provider.

Republicans:

Bill Thomas, a former chairman of the House Ways and Means Committee and a conservative, pro-business lawmaker

Douglas Holtz-Eakin, a conservative economic adviser to Republican Sen. John McCain of Arizona during last year's presidential campaign

Keith Hennesey, former director of the Bush White House's National Economic Council (also see his invitation to provide input to the FCIC at: his blog) and

Peter Wallison, a director at the American Enterprise Institute, a conservative think tank.

See the July 16, 2009 NY Times article.

The Commission held its first public meeting September 17, 2009 and named Thomas Greene as Executive Director. Greene was Chief Assistant Attorney General and head of the Public Rights Division of the California Attorney General’s Office.

The enabling legislation was The Fraud Enforcement and Recovery Act of 2009, or FERA, (Pub.Law 111-21, 123 Stat. 1617, S. 386) signed May 20, 2009 which takes a number of steps to enhance criminal enforcement of federal fraud laws, especially regarding financial institutions, mortgage fraud, and securities or commodities fraud.

Section 5 of the Act creates a legislative commission, with each house of the Congress represented by three members appointed by the majority party and two members appointed by the minority, none of whom may be employees of the Federal government or any state or local government. The charter of the FCIC provides a shopping list of the possible sources of the recent financial disaster and bailout.

The purpose of the Commission is

(1) "to examine the causes, domestic and global, of the current financial and economic crisis in the United States. Specifically the role of ---" the following (22) possible causes:

(A) fraud and abuse in the financial sector, including fraud and abuse towards consumers in the mortgage sector;
(B) Federal and State financial regulators, including the extent to which they enforced, or failed to enforce statutory, regulatory, or supervisory requirements;
(C) the global imbalance of savings, international capital flows, and fiscal imbalances of various governments;
(D) monetary policy and the availability and terms of credit;
(E) accounting practices, including, mark-to-market and fair value rules, and treatment of off-balance sheet vehicles;
(F) tax treatment of financial products and investments;
(G) capital requirements and regulations on leverage and liquidity, including the capital structures of regulated and non-regulated financial entities;
(H) credit rating agencies in the financial system, including, reliance on credit ratings by financial institutions and Federal financial regulators, the use of credit ratings in financial regulation, and the use of credit ratings in the securitization markets;
(I) lending practices and securitization, including the originate-to-distribute model for extending credit and transferring risk;
(J) affiliations between insured depository institutions and securities, insurance, and other types of nonbanking companies;
(K) the concept that certain institutions are ‘‘too-big-to- fail’’ and its impact on market expectations;
(L) corporate governance, including the impact of company conversions from partnerships to corporations;
(M) compensation structures;
(N) changes in compensation for employees of financial companies, as compared to compensation for others with similar skill sets in the labor market;
(O) the legal and regulatory structure of the United States housing market;
(P) derivatives and unregulated financial products and practices, including credit default swaps;
(Q) short-selling;
(R) financial institution reliance on numerical models, including risk models and credit ratings;
(S) the legal and regulatory structure governing financial institutions, including the extent to which the structure creates the opportunity for financial institutions to engage in regulatory arbitrage;
(T) the legal and regulatory structure governing investor and mortgagor protection;
(U) financial institutions and government-sponsored enterprises; and
(V) the quality of due diligence undertaken by financial institutions;

(2) to examine the causes of the collapse of each major financial institution that failed (including institutions that were acquired to prevent their failure) or was likely to have failed if not for the receipt of exceptional Government assistance from the Secretary of the Treasury during the period beginning in August 2007 through April 2009;

(3) to submit a report under subsection [by December 15, 2010] (h);

(4) to refer to the Attorney General of the United States and any appropriate State attorney general any person that the Commission finds may have violated the laws of the United States in relation to such crisis; and

(5) to build upon the work of other entities, and avoid unnecessary duplication, by reviewing the record of the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, other congressional committees, the Government Accountability Office, other legislative panels, and any other department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States (to the fullest extent permitted by law) with respect to the current financial and economic crisis.