This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
As noted in today's Wall Street Journal, in addition to the interconnectedness between Wall Street and the government, some of the FCIC's members are conflicted. The WSJ raises the issue of the connection between FCIC Chair, Phil Angelides, FCIC member Byron Georgiou and FCIC Senior Staff member Christopher Seefer and the plaintiffs' law firm Coughlin Stoia Geller Rudman & Robbins, the firm that was created by the non-indicted lawyers of the disgraced law firm Milberg Weiss.
The commission chairman, former California Treasurer Phil Angelides, was a trustee of state pension funds that periodically used Coughlin Stoia's predecessor firms in securities litigation against the likes of former telecommunications giant WorldCom, which collapsed in a massive accounting fraud that resulted in a 25-year prison term for its CEO. Mr. Angelides received about $250,000 in contributions from lawyers with the firm during his 2006 campaign for governor.
Why should we care about this? After all, there are counter-balances to the plaintiffs attorneys on the panel, right? Here's the problem: if these guys are asking questions to the FCIC witnesses primarily to create a permanent record to be used later to sue these firms, we're not going to get very far in the regulatory reform process.
When asking his first question, Georgiou spent most of his allotted time sounding like he was making an opening statement. Within moments, he invoked "lack of accountability ... inadequate compliance ... fiduciary duty ... burden of loss on pension funds ..." I think that there was a question underneath it all - something to the effect of "how can you sell an asset that you know is toxic?" Given his background, it's hard to know whether he's preparing a suit for CALPERS or trying to help the panel understand what really happened.
There have been many who have gotten into the act as to what direction the FCIC should take. So far, I like these ten questions the best. I'll be blogging more about the FCIC - time for me to focus on my favorite commission member, Brooksley Born.
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