The Financial Crisis Inquiry Commission: Bankers vs. Lawyers?

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The Financial Crisis Inquiry Commission, a panel created by Congress to look into the causes of the financial crisis, holds its first hearing today. But, as the Wall Street Journal points out, its members aren’t exactly neutral investigators:

(The panel) will begin taking sworn testimony Wednesday from the chief executives of several big Wall Street banks, including Goldman Sachs Group Inc. and J. P. Morgan Chase & Co…Business interests (are) complaining that some panel members’ ties to a major plaintiffs law firm could aid litigants seeking to sue financial firms.

The San Diego-based law firm with ties to the commission, Coughlin Stoia Geller Rudman & Robbins, has filed dozens of lawsuits against major banks since 2007, according to federal court records. A longtime lawyer with the firm, Byron Georgiou, sits on the 10-member commission. A senior commission staffer, Christopher Seefer, is on leave from his position as a partner with the law firm.

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.

Some panel members and staffers have close ties to businesses. Vice chairman Bill Thomas, a former Republican congressman, is a government-relations adviser with a law firm that has banking clients. Peter Wallison is a fellow at the conservative American Enterprise Institute and a critic of many financial-regulation proposals. The commission employs a number of lawyers who previously worked for law firms that typically defend corporations, including banks.

CBS’ Jill Schlesinger points out that although the panel attorneys are “counterbalanced” by others on the panel, “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.” That’s absolutely true.

Reuters is liveblogging the inquiry here.

The New York Times has a list of questions that should be asked of the bankers.

Here are photos and profiles of each of the commissioners.

Found out more at the FCIC website.

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