Following the 1929 Wall Street Crash, the U.S. economy had gone into a depression, and a large number of banks failed. The Pecora Investigation sought to uncover the causes of the financial collapse. Lasting from 1932 through 1934, and named for the Commission’s fourth and final chief council, Ferdinand Pecora, the Commission experienced a rocky political course but prevailed to uncover massive financial fraud and crimes. The Commission’s findings were highly educational and formed the basis of many Congressional legislative moves that were enacted to prevent a subsequent crash. In 1999, a key piece of this legislation was repealed in response to decades of heavily, well funded lobbying efforts on behalf of the financial industry. Less than ten years later, America experienced a similar Wall Street crash based on much of the same conduct that was investigated and exposed by the Pecora Commission.
Most of our elected officials today don’t have the political will to form a strong, well funded foreclosure fraud (and mortgage-backed securities) investigative commission that would mirror the work of the Pecora Investigation. We’ve seen a few good Congressional reports on the financial crisis, the most notable being the Levin-Coburn Report. There have been some excellent reports out of the HUD Office of the Inspector General. The rest of the governmental investigations and reports have been weak, inaccurate, subject to partisan bickering, or worse, whitewashed to ban words such as “Wall Street” and “shadow banking.” Those employed at government oversight agencies who do wish to uncover and expose the fraud and it’s impact on the American people are often ostracized, fired, intimidated, or silenced like Neil Barofsky former inspector general of TARP fraud, Lam Pham, fired economist at the Congressional Budget Office, John Kelleher who “resigned” from the Nevada AG’s foreclosure fraud task force, and the two ousted assistant attorneys general in Florida, June Clarkson and Theresa Edwards.
In January 2012, President Obama announced during his State of the Union Address that he was establishing a Residential Mortgage Backed Securities Working Group. This announcement was met with great fanfare, but eight months have passed and the nation has not heard anything meaningful about this working group’s efforts or accomplishments since Obama’s January 2012 speech.