Taibbi wonders if it’s real. Well, of course it’s not “real” – it’s a campaign strategy. But that doesn’t mean we can’t make him to follow through on it:
If as SEC enforcement chief Bob Khuzami has not investigated the vast corruption involved with the creation of mortgage backed securities (it’s called “securitization” – it should be policed by the SECURITIES and exchange commission), then why would he start now? Even leaving out his potential culpability from his Deutsche days, Khuzami has been part of the problem, if anything.
I would feel better about a committee that not only didn’t have a White House flack and a failed/compromised SEC enforcement chief sitting on it, but had nobody with any ties to Wall Street at all. The argument for them would be that we need someone with expertise on the committee, but I’m not buying it. I’d rather see Schneiderman hole up in an abandoned warehouse with ten vice detectives from someplace like Detroit or Miami. And Charles Martin Smith, if they can get him.
Seriously: despite what people think, the crimes we’re dealing with are not terribly complicated, and any veteran investigator would grasp the basic concept – taking worthless crap and selling it as high-end merchandise – within ten minutes. The most important element contributing to the success of a committee like this is a locked room full of clean hands. And Breuer and Khuzami are not a good start.
But it’s too early to say what is going on. Everything that I’ve heard about Schneiderman in the last year leads me to believe that he’s the genuine article. I haven’t heard a single thing suggesting otherwise. But there are certainly a lot of curious elements here. For one thing, as Yves Smith points out, Schneiderman really isn’t getting much extra authority by taking this post. As New York AG he could already have taken this investigation anywhere he wanted:
It’s clear what the Administration is getting from getting Schneiderman aligned with them. It is much less clear why Schneiderman is signing up. He can investigate and prosecute NOW. He has subpoena powers, staff, and the Martin Act. He doesn’t need to join a Federal committee to get permission to do his job. And this is true for ALL the others agencies represented on this committee. They have investigative and enforcement powers they have chosen not to use. So we are supposed to believe that a group, ex Schneiderman, that has been remarkably complacent, will suddenly get religion on the mortgage front because they are all in a room and Schneiderman is a co-chair?
One thing we do know: Obama’s decision to tap Schneiderman publicly, and dump Geithner, and whisper about a millionaire’s tax, signals a shift in its public attitude toward the Wall Street corruption issue. The administration is clearly listening to the Occupy movement. Whether it’s now acting on their complaints, or just trying to look like it’s doing something, is another question. It’s way too early to tell. But it’s certainly very interesting.