Speaker of the House Nancy Pelosi, speaking at the Commonwealth Club in San Francisco today, said she would urge the House of Representatives upon its return next week to authorize an investigation into "what happened on Wall Street."
Pelosi, speaking to the Commonwealth Club of California, said she wants the panel to be modeled after the Pecora Commission, a bipartisan investigative body established by the U.S. Senate in 1932 to examine the causes and abuses of the Wall Street crash of 1929 and to prevent a repeat.
"They investigated what happened in the markets," including conflicts of interests and irregularities that set off such devastating effects on the U.S. economy, she said. When the commission issued its findings during the administration of Franklin Delano Roosevelt, "they had tangible recommendations," she said, which helped generate widespread public support for major banking system reforms and new securities laws.
The Speaker has already discussed her proposal with Secretary of the Treasury Timothy Geithner and expects to raise the matter with her House colleagues upon their return from spring district work period next week.
"People are very unhappy with these bailouts," particularly multimillion-dollar bonuses paid out to executives of failing firms like American Insurance Group, or AIG, that have received federal bailout funds, she said.
"Seventy five percent of the American people, at least, want an investigation of what happened on Wall Street," the Speaker said to applause from the audience.
"We’re going to have a commission… even if it is only in the House of Representatives," Pelosi vowed, saying it would allow Americans "to have a clearer understanding of how we got here – and the risk that’s been taken by the taxpayers in all this."
The Pecora Commission is the name commonly used to describe the commission established on March 4, 1932, by the United States Senate Committee on Banking, Housing, and Urban Affairs to investigate the causes of the Wall Street Crash of 1929. The name refers to the fourth and final Chief Counsel to the committee, Ferdinand Pecora.
The Pecora Commission initiated major reform of the American financial system. As Chief Counsel, Ferdinand Pecora personally examined many high-profile witnesses that included some of the nation’s most influential bankers and stockbrokers.
In 1939 Ferdinand Pecora published his memoirs that recounted details of the investigations. Titled "Wall Street Under Oath", Pecora wrote: "Bitterly hostile was Wall Street to the enactment of the regulatory legislation." As to disclosure rules, he stated that "Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker’s stoutest allies."