Meet Ferdinand Pecora

I have just been introduced to the story of Ferdinand Pecora, and would like to celebrate his accomplishment in this segment. He was a central figure in the reform of the banking laws in the aftermath of the crash of 1929.

He has been referred to as "the Jackie Robinson" of his generation. A Sicilian immigrant of humble beginnings, he was an assistant district attorney from Manhattan when he was appointed chief counsel to the Senate Banking Committee in 1933. He took on the titans of Wall Street, exposed questionable banking practices (like re-packaging bad loans and selling them as bonds), and was named one of the Commissioners to the newly formed Securities and Exchange Commission. He was given full support by President Franklin D. Rooseveldt.

Fast forward to House Speaker Nancy Pelosi and her recent announcement to Tim Geithner that she will form a special commission to investigate the roots of the financial industry collapse along the lines of FDR's "Pecora Commission". A great start.

For this to germinate, it has been suggested by the former chief economist of the IMF, Mr. Simon Johnson, that three things would have to happen. First, a general counsel with the bulldog tenacity of Pecora has to be appointed. (Suggestions have included Elizabeth Warren, current head of the congressional oversight panel of the T.A.R.P. program; Patrick Fitzgerald, federal prosecutor of Scooter Libby and Rod Blagojevich; and New York Attorney General Andrew Cuomo, outspoken critic of Wall Street and Washington's handling of the bailout.

Secondly, a joint congressional commission won't work: an independent commission with subpoena power is needed. (For the last 20 years the financial services industry has been the biggest campaign contributor in all federal election cycles; ties to companies you're questioning is like putting on kid gloves before pointing your finger at them.

Third is to get the kind of presidential support that FDR gave Mr. Pecora. For that to happen, President Obama will have to subject his chief economic advisor Mr. Larry Summers and Tim Geithner, his secretary of the treasury, to intense scrutiny because of their past relations with Wall Street. (Geithner was a disciple of Robert Rubin, who with Summers was in the Clinton Cabinet that witnessed the repeal of the Glass-Steagall Act: the passage of which, in 1934, separated commercial and investment banking.)

David slew Goliath before. Back then he was known as Ferdinand Pecora. Stan